The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $97,456. The bank statement indicated a balance of $127,960 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 $30,050. b. A deposit of $19,720, representing receipts of June 30, had been made too late to appear on the bank statement. c. The bank collected $22,149 on a $20,700 note, including interest of $1,449. d. A check for $1,450 returned with the statement had been incorrectly recorded by Pala Medical Co. as $145. The check was for the payment of an obligation to Skyline Supply Co. for a purchase on account. e. A check drawn for $290 had been erroneously charged by the bank as $920. f. Bank service charges for June amounted to $40. Instructions 1. Prepare a bank reconciliation. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. "Add:" & "Deduct:" will automatically appear if it is required. For those boxes in which you must enter subtracted or negative numbers use a minus sign. 2. Journalize the necessary entries. Refer to the Chart of Accounts for exact wording of account titles. 3. If a balance sheet were prepared for Pala Medical Co. on June 30, 20Y1, what amount should be reported as cash?

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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The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $97,456. The bank statement indicated a balance of $127,960 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 $30,050.
b.	A deposit of $19,720, representing receipts of June 30, had been made too late to appear on the bank statement.
c.	The bank collected $22,149 on a $20,700 note, including interest of $1,449.
d.	A check for $1,450 returned with the statement had been incorrectly recorded by Pala Medical Co. as $145. The check was for the payment of an obligation to Skyline Supply Co. for a purchase on account.
e.	A check drawn for $290 had been erroneously charged by the bank as $920.
f.	Bank service charges for June amounted to $40.

	Instructions
1.	Prepare a bank reconciliation. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. "Add:" & "Deduct:" will automatically appear if it is required. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
2.	Journalize the necessary entries. Refer to the Chart of Accounts for exact wording of account titles.
3.	If a balance sheet were prepared for Pala Medical Co. on June 30, 20Y1, what amount should be reported as cash?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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