The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $8,550. The bank statement indicated a balance of $9,940 on June 30, 20Y1. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: a. Checks outstanding totaled $3,580. b. A deposit of $3,730, representing receipts of June 30, had been made too late to appear on the bank statement. c. The bank collected $1,940 on a $1,840 note, including interest of $100. d. A check for $880 returned with the statement had been incorrectly recorded by Pala Medical Co. as $800. The check was for the payment of an obligation to Skyline Supply Co. for a purchase on account. e. A check drawn for $30 had been erroneously charged by the bank as $300. f. Bank service charges for June amounted to $50. Required: 1. Prepare a bank reconciliation. Pala Medical Co. Bank Reconciliation June 30, 20Y1 Cash balance according to bank statement 8,550 Adjustments: Deposit of June 30, not recorded by bank 3,730 Bank error in charging check as $300 instead of $30 270 Outstanding checks -3,580 Total adjustments 420 Adjusted balance 8,130 Cash balance according to company's records Adiustments 9,940

The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $8,550. The bank statement indicated a balance of $9,940 on June 30, 20Y1. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: a. Checks outstanding totaled $3,580. b. A deposit of $3,730, representing receipts of June 30, had been made too late to appear on the bank statement. c. The bank collected $1,940 on a $1,840 note, including interest of $100. d. A check for $880 returned with the statement had been incorrectly recorded by Pala Medical Co. as $800. The check was for the payment of an obligation to Skyline Supply Co. for a purchase on account. e. A check drawn for $30 had been erroneously charged by the bank as $300. f. Bank service charges for June amounted to $50. Required: 1. Prepare a bank reconciliation. Pala Medical Co. Bank Reconciliation June 30, 20Y1 Cash balance according to bank statement 8,550 Adjustments: Deposit of June 30, not recorded by bank 3,730 Bank error in charging check as $300 instead of $30 270 Outstanding checks -3,580 Total adjustments 420 Adjusted balance 8,130 Cash balance according to company's records Adiustments 9,940

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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