InstructionsThe cash account for Norwegian Medical Co. at April 30 indicated a balance of $82,726. The bank statement indicated a balance of $128,040 on April 30. Comparing the bank statement and the accompa canceled checks and memos with the records revealed the following reconciling items:Checks outstanding totaled $34,090.A deposit of $18,430, representing receipts of April 30, had been made too late to appear on the bank statement.The bank collected $31,779 on a $29,700 note, including interest of $2,079.A check for $1,900 returned with the statement had been incorrectly recorded by Norwegian Medical Co. as $190. The check was for thepayment of an obligation to Universal Supply Co. for a purchase on account.A check drawn for $370 had been erroneously charged by the bank as $730.Bank service charges for April amounted to $55.Required Prepare a bank reconciliation. Be sure to complete the statement heading. Refer to the Labels and Amount Descriptions for the exact wording of text entries. “Add:” or “Deduct:” will automatically appear if it is required. Enter all amounts as positive numbers.Journalize the necessary entries. The accounts have not been closed. Refer to the chart of accounts for the exact wording of the account titles. **Chart of Accounts****Norwegian Medical Co.***General Ledger***ASSETS**- 110 Cash- 111 Petty Cash- 120 Accounts Receivable- 131 Notes Receivable- 141 Merchandise Inventory- 145 Office Supplies- 146 Store Supplies- 151 Prepaid Insurance- 181 Land- 191 Office Equipment- 192 Accumulated Depreciation-Office Equipment- 193 Store Equipment- 194 Accumulated Depreciation-Store Equipment**LIABILITIES**- 211 Accounts Payable-Universal Supply Co.- 221 Notes Payable- 222 Interest Payable- 231 Salaries Payable- 241 Sales Tax Payable**EQUITY**- 310 Owner, Capital- 311 Owner, Drawing**REVENUE**- 410 Sales- 610 Interest Revenue**EXPENSES**- 510 Cost of Merchandise Sold- 515 Credit Card Expense- 516 Cash Short and Over- 520 Salaries Expense- 531 Advertising Expense- 532 Delivery Expense- 533 Insurance Expense- 534 Office Supplies Expense- 535 Rent Expense- 536 Repairs Expense- 537 Selling Expenses- 538 Store Supplies Expense- 561 Depreciation Expense-Office Equipment- 562 Depreciation Expense-Store Equipment- 590 Miscellaneous Expense- 710 Interest Expense---**Labels and Amount Descriptions****Labels**- April 30- For the Month Ended April 30**Amount Descriptions**- Bank error in charging check as $370 instead of $730- Bank error in charging check as $730 instead of $370- Bank service charges- Check for $730 returned because of insufficient funds- Deposit of April 30, not recorded by bank- Error in recording check- Error in recording deposit- Note and interest collected by bank- Outstanding checks **Image Transcription for Educational Website**---**1. Bank Reconciliation Preparation****Instruction:** Prepare a bank reconciliation. Be sure to complete the statement heading. Refer to the Labels and Amount Descriptions for the exact wording of text entries. "Add:" or "Deduct:" will automatically appear as required. Enter all amounts as positive numbers.---**Norwegian Medical Co.****Bank Reconciliation**| **(Label)** ||------------------------------------------|| **Cash balance according to bank statement** | | | | | | | | **Adjusted balance** | | || **Cash balance according to company’s records** | | | | | | | | **Adjusted balance** | ---**2. Journal Entries****Instruction:** Journalize the necessary entries. The accounts have not been closed. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. One line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.---**JOURNAL**| **DATE** | **DESCRIPTION** | **POST. REF.** | **DEBIT** | **CREDIT** | **ACCOUNTING EQUATION** ||----------|-----------------|----------------|-----------|------------|-------------------------|| | | | | | **ASSETS** | **LIABILITIES** | **EQUITY** || | | | | | | | || | | | | | | | || | | | | | | | || | | | | | | | || | | | | | | | |---**Final Question:****3. Cash Reporting****Prompt:** If a balance sheet is prepared for Norwegian Medical Co. on April 30, what amount should be reported as cash?| **$** ||-------|---**Diagram Explanation:**- The first section features a table for bank reconciliation, with placeholders for the company’s cash balance according to the bank statement and company records. The aim is to reconcile these differences, adjusting to find the accurate balances

Introduction: Journals: Recording of a business transactions in a chronological order. First step in the preparation of final accounts is recording journals.1 ) Bank Reconciliation statement: 2 ) Entries: 3 ) Cash balance to be reported is $ 112740

Answered: The cash account for Norwegian Medical…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Instructions

The cash account for Norwegian Medical Co. at April 30 indicated a balance of $82,726. The bank statement indicated a balance of $128,040 on April 30. Comparing the bank statement and the accompa canceled checks and memos with the records revealed the following reconciling items:

Checks outstanding totaled $34,090.
A deposit of $18,430, representing receipts of April 30, had been made too late to appear on the bank statement.
The bank collected $31,779 on a $29,700 note, including interest of $2,079.
A check for $1,900 returned with the statement had been incorrectly recorded by Norwegian Medical Co. as $190. The check was for the

payment of an obligation to Universal Supply Co. for a purchase on account.
A check drawn for $370 had been erroneously charged by the bank as $730.
Bank service charges for April amounted to $55.

1. Required
1. Prepare a bank reconciliation. Be sure to complete the statement heading. Refer to the Labels and Amount Descriptions for the exact wording of text entries. “Add:” or “Deduct:” will automatically appear if it is required. Enter all amounts as positive numbers.
2. Journalize the necessary entries. The accounts have not been closed. Refer to the chart of accounts for the exact wording of the account titles.

**Chart of Accounts**

**Norwegian Medical Co.**

*General Ledger*

**ASSETS**
- 110 Cash
- 111 Petty Cash
- 120 Accounts Receivable
- 131 Notes Receivable
- 141 Merchandise Inventory
- 145 Office Supplies
- 146 Store Supplies
- 151 Prepaid Insurance
- 181 Land
- 191 Office Equipment
- 192 Accumulated Depreciation-Office Equipment
- 193 Store Equipment
- 194 Accumulated Depreciation-Store Equipment

**LIABILITIES**
- 211 Accounts Payable-Universal Supply Co.
- 221 Notes Payable
- 222 Interest Payable
- 231 Salaries Payable
- 241 Sales Tax Payable

**EQUITY**
- 310 Owner, Capital
- 311 Owner, Drawing

**REVENUE**
- 410 Sales
- 610 Interest Revenue

**EXPENSES**
- 510 Cost of Merchandise Sold
- 515 Credit Card Expense
- 516 Cash Short and Over
- 520 Salaries Expense
- 531 Advertising Expense
- 532 Delivery Expense
- 533 Insurance Expense
- 534 Office Supplies Expense
- 535 Rent Expense
- 536 Repairs Expense
- 537 Selling Expenses
- 538 Store Supplies Expense
- 561 Depreciation Expense-Office Equipment
- 562 Depreciation Expense-Store Equipment
- 590 Miscellaneous Expense
- 710 Interest Expense

---

**Labels and Amount Descriptions**

**Labels**
- April 30
- For the Month Ended April 30

**Amount Descriptions**
- Bank error in charging check as $370 instead of $730
- Bank error in charging check as $730 instead of $370
- Bank service charges
- Check for $730 returned because of insufficient funds
- Deposit of April 30, not recorded by bank
- Error in recording check
- Error in recording deposit
- Note and interest collected by bank
- Outstanding checks

**Image Transcription for Educational Website**

---

**1. Bank Reconciliation Preparation**

**Instruction:** Prepare a bank reconciliation. Be sure to complete the statement heading. Refer to the Labels and Amount Descriptions for the exact wording of text entries. "Add:" or "Deduct:" will automatically appear as required. Enter all amounts as positive numbers.

---

**Norwegian Medical Co.**

**Bank Reconciliation**

| **(Label)** |
|------------------------------------------|
| **Cash balance according to bank statement** |
| |
| |
| |
| **Adjusted balance** |
| |
| **Cash balance according to company’s records** |
| |
| |
| |
| **Adjusted balance** |

---

**2. Journal Entries**

**Instruction:** Journalize the necessary entries. The accounts have not been closed. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. One line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

---

**JOURNAL**

| **DATE** | **DESCRIPTION** | **POST. REF.** | **DEBIT** | **CREDIT** | **ACCOUNTING EQUATION** |
|----------|-----------------|----------------|-----------|------------|-------------------------|
| | | | | | **ASSETS** | **LIABILITIES** | **EQUITY** |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |

---

**Final Question:**

**3. Cash Reporting**

**Prompt:** If a balance sheet is prepared for Norwegian Medical Co. on April 30, what amount should be reported as cash?

| **$** |
|-------|

---

**Diagram Explanation:**

- The first section features a table for bank reconciliation, with placeholders for the company’s cash balance according to the bank statement and company records. The aim is to reconcile these differences, adjusting to find the accurate balances

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