The cash account for American Medical Co. at April 30 indicated a balance of $11,780. The bank statement indicated a balance of $13,830 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: a. Checks outstanding totaled $4,980. b. A deposit of $5,190, representing receipts of April 30, had been made too late to appear on the bank statement. c. The bank collected $2,700 on a $2,560 note, including interest of $140. d. A check for $550 returned with the statement had been incorrectly recorded by American Medical Co. as $500. The check was for the payment of an obligation to Targhee Supply Co. for a purchase on account. e. A check drawn for $40 had been erroneously charged by the bank as $400. f. Bank service charges for April amounted to $30. Required: 1. Prepare a bank reconciliation. American 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. For a compound transaction, if an amount box does not require an entry, leave it blank. a. April 30 b. April 30

College Accounting (Book Only): A Career Approach
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Chapter6: Bank Accounts, Cash Funds, And Internal Controls
Section: Chapter Questions
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The cash account for American Medical Co. at April 30 indicated a balance of $11,780. The bank statement indicated a balance
of $13,830 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records
revealed the following reconciling items:
a. Checks outstanding totaled $4,980.
b. A deposit of $5,190, representing receipts of April 30, had been made too late to appear on the bank statement.
c. The bank collected $2,700 on a $2,560 note, including interest of $140.
d. A check for $550 returned with the statement had been incorrectly recorded by American Medical Co. as $500. The check
was for the payment of an obligation to Targhee Supply Co. for a purchase on account.
e. A check drawn for $40 had been erroneously charged by the bank as $400.
f. Bank service charges for April amounted to $30.
Required:
1. Prepare a bank reconciliation.
American 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.
For a compound transaction, if an amount box does not require an entry, leave it blank.
a. April 30
b. April 30
Transcribed Image Text:The cash account for American Medical Co. at April 30 indicated a balance of $11,780. The bank statement indicated a balance of $13,830 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: a. Checks outstanding totaled $4,980. b. A deposit of $5,190, representing receipts of April 30, had been made too late to appear on the bank statement. c. The bank collected $2,700 on a $2,560 note, including interest of $140. d. A check for $550 returned with the statement had been incorrectly recorded by American Medical Co. as $500. The check was for the payment of an obligation to Targhee Supply Co. for a purchase on account. e. A check drawn for $40 had been erroneously charged by the bank as $400. f. Bank service charges for April amounted to $30. Required: 1. Prepare a bank reconciliation. American 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. For a compound transaction, if an amount box does not require an entry, leave it blank. a. April 30 b. April 30
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