seed balance e cash account for Amerkan Medical da at April

seed balance: e cash account for Amerkan Medical da at April 30 indicated a balance of SSHye The bank statement indicated a balance of 8588,600 on Apeil 30. Comparing the bank statement and the accompanying canceled checks and memos with the recornds revealed the following reconciling itemsc Checks outstanding 0otaled 861,280. b. A deposit of $42,500, repeesensing receipts of April 30, had been made too late to appear on the bank statement The bank collected $42,000 on a $40,000 note, including interest of $2,000. d. A check for $7,600 retumed with the statement had been incorrectly recorded by American Medical Co as $760. The check was for the payment of an obligation to Targhee Supply Co. for a purchase on account e. A check drawn for $240 had been eroncously charged by the bank as $420 E Bank service charges for April amounted to S145 Instructions 1. Prepare a bank reconciliation 2. Journalize the necessary entries. The accounts have not been dlosed. 3. If a balance sheet is prepared for American Medical Co, on April 30, what amount should he reported as cashe

Solution

Journal:

3. Amount reported in the balance sheet= true cash balance= 370000

Bank statement:
Ending balance as per bank statement		3,88,600
Additions:
Deposit in transit #	42,500
Bank error	180
Deductions:
Check in transit #	-61,280
True cash balance		3,70,000
Company books:
Ending balance as per cash account		3,34,985
Additions:
Note collected by bank	40,000
Interest on note collected	2,000
Incorrectly recorded check	760
Deductions:
Service charge	-145
Check returned	-7,600
True cash balance		3,70,000