Question Content AreaBank Reconciliation and EntriesThe cash account for Norwegian Medical Co. at April 30 indicated a balance of $12,480. The bank statement indicated a balance of $14,430 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:Checks outstanding totaled $5,190.A deposit of $5,410, representing receipts of April 30, had been made too late to appear on the bank statement.The bank collected $2,810 on a $2,670 note, including interest of $140.A check for $550 returned with the statement had been incorrectly recorded by Norwegian Medical Co. as $500. The check was for the payment of an obligation to Universal Supply Co. for a purchase on account.A check drawn for $60 had been erroneously charged by the bank as $600.Bank service charges for April amounted to $50. 1. Prepare a bank reconciliation.Norwegian Medical Co.Bank ReconciliationApril 30Cash balance according to bank statementAdjusted balanceCash balance according to company's recordsAdjusted balance.2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. If an amount box does not require an entry, leave it blank.a. April 30b. April 303. If a balance sheet is prepared for Norwegian Medical Co. on April 30, what amount should be reported as cash?QO0000000000

We should deduct outstanding checks from cash Balance according to bank to get Adjusted balance.

Answered: Bank Reconciliation and Entries The…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter5: Internal Control And Cash

Section: Chapter Questions

Problem 5.21E

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Question Content Area

Bank Reconciliation and Entries

The cash account for Norwegian Medical Co. at April 30 indicated a balance of $12,480. The bank statement indicated a balance of $14,430 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:

Checks outstanding totaled $5,190.
A deposit of $5,410, representing receipts of April 30, had been made too late to appear on the bank statement.
The bank collected $2,810 on a $2,670 note, including interest of $140.
A check for $550 returned with the statement had been incorrectly recorded by Norwegian Medical Co. as $500. The check was for the payment of an obligation to Universal Supply Co. for a purchase on account.
A check drawn for $60 had been erroneously charged by the bank as $600.
Bank service charges for April amounted to $50.

1. Prepare a bank reconciliation.
Norwegian Medical Co.
Bank Reconciliation
April 30
Cash balance according to bank statement
Adjusted balance
Cash balance according to company's records
Adjusted balance.
2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. If an amount box does not require an entry, leave it blank.
a. April 30
b. April 30
3. If a balance sheet is prepared for Norwegian Medical Co. on April 30, what amount should be reported as cash?
QO
00000000
00

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