The cash account for American Medical Co. at April 30 indicated a balance of $84,457. The bank statement indicated a balance of $127,190 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 $33,310. B. A deposit of $17,610, representing receipts of April 30, had been made too late to appear on the bank statement. C. The bank collected $28,248 on a $26,400 note, including interest of $1,848. D. A check for $1,100 returned with the statement had been incorrectly recorded by American Medical Co. as $110. The check was for the payment of an obligation to Targhee Supply Co. for a purchase on account. E. A check drawn for $680 had been erroneously charged by the bank as $860. F. Bank service charges for April amounted to $45. Instructions 1. Prepare a bank reconciliation. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. “Deduct:” or “Add:” will automatically appear if it is required. 2. Journalize the necessary entries. The accounts have not been closed. Refer to the Chart of Accounts for exact wording of account titles. 3. If a balance sheet is prepared for American Medical Co. on April 30, what amount should be reported as cash? Chart of Accounts CHART OF ACCOUNTS American Medical Co. General Ledger ASSETS 110 Cash 111 Petty Cash 120 Accounts Receivable 131 Notes Receivable 141 Merchandise Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 181 Land 191 Office Equipment 192 Accumulated Depreciation-Office Equipment 193 Store Equipment 194 Accumulated Depreciation-Store Equipment LIABILITIES 211 Accounts Payable-Targhee Supply Co. 221 Notes Payable 222 Interest Payable 231 Salaries Payable 241 Sales Tax Payable EQUITY 310 Owner, Capital 311 Owner, Drawing 312 Income Summary REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 515 Credit Card Expense 516 Cash Short and Over 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Insurance Expense 534 Office Supplies Expense 535 Rent Expense 536 Repairs Expense 537 Selling Expenses 538 Store Supplies Expense 561 Depreciation Expense-Office Equipment 562 Depreciation Expense-Store Equipment 590 Miscellaneous Expense 710 Interest Expense Amount Descriptions Amount Descriptions Bank error in charging check as $680 instead of $860 Bank error in charging check as $860 instead of $680 Bank service charges Check for $860 returned because of insufficient funds Deposit of April 30, not recorded by bank Error in recording check Error in recording April 30 deposit Outstanding checks Note and interest collected by bank Bank Reconciliation 1. Prepare a bank reconciliation. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. “Deduct:” or “Add:” will automatically appear if it is required. Whenever there is more than one adjusting item in the bank portion of the reconciliation or the general ledger portion of the bank reconciliation, enter in the order presented in the instructions. AMERICAN MEDICAL CO. Bank Reconciliation April 30 1 Cash balance according to bank statement 2 3 4 5 6 Adjusted balance 7 8 Cash balance according to company’s records 9 10 11 12 13 Adjusted balance

The cash account for American Medical Co. at April 30 indicated a balance of $84,457. The bank statement indicated a balance of $127,190 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 $33,310. B. A deposit of $17,610, representing receipts of April 30, had been made too late to appear on the bank statement. C. The bank collected $28,248 on a $26,400 note, including interest of $1,848. D. A check for $1,100 returned with the statement had been incorrectly recorded by American Medical Co. as $110. The check was for the payment of an obligation to Targhee Supply Co. for a purchase on account. E. A check drawn for $680 had been erroneously charged by the bank as $860. F. Bank service charges for April amounted to $45. Instructions 1. Prepare a bank reconciliation. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. “Deduct:” or “Add:” will automatically appear if it is required. 2. Journalize the necessary entries. The accounts have not been closed. Refer to the Chart of Accounts for exact wording of account titles. 3. If a balance sheet is prepared for American Medical Co. on April 30, what amount should be reported as cash? Chart of Accounts CHART OF ACCOUNTS American Medical Co. General Ledger ASSETS 110 Cash 111 Petty Cash 120 Accounts Receivable 131 Notes Receivable 141 Merchandise Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 181 Land 191 Office Equipment 192 Accumulated Depreciation-Office Equipment 193 Store Equipment 194 Accumulated Depreciation-Store Equipment LIABILITIES 211 Accounts Payable-Targhee Supply Co. 221 Notes Payable 222 Interest Payable 231 Salaries Payable 241 Sales Tax Payable EQUITY 310 Owner, Capital 311 Owner, Drawing 312 Income Summary REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 515 Credit Card Expense 516 Cash Short and Over 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Insurance Expense 534 Office Supplies Expense 535 Rent Expense 536 Repairs Expense 537 Selling Expenses 538 Store Supplies Expense 561 Depreciation Expense-Office Equipment 562 Depreciation Expense-Store Equipment 590 Miscellaneous Expense 710 Interest Expense Amount Descriptions Amount Descriptions Bank error in charging check as $680 instead of $860 Bank error in charging check as $860 instead of $680 Bank service charges Check for $860 returned because of insufficient funds Deposit of April 30, not recorded by bank Error in recording check Error in recording April 30 deposit Outstanding checks Note and interest collected by bank Bank Reconciliation 1. Prepare a bank reconciliation. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. “Deduct:” or “Add:” will automatically appear if it is required. Whenever there is more than one adjusting item in the bank portion of the reconciliation or the general ledger portion of the bank reconciliation, enter in the order presented in the instructions. AMERICAN MEDICAL CO. Bank Reconciliation April 30 1 Cash balance according to bank statement 2 3 4 5 6 Adjusted balance 7 8 Cash balance according to company’s records 9 10 11 12 13 Adjusted balance

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter6: Bank Accounts, Cash Funds, And Internal Controls

Section: Chapter Questions

Problem 5PA

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Question

A.	Checks outstanding totaled $33,310.
B.	A deposit of $17,610, representing receipts of April 30, had been made too late to appear on the bank statement.
C.	The bank collected $28,248 on a $26,400 note, including interest of $1,848.
D.	A check for $1,100 returned with the statement had been incorrectly recorded by American Medical Co. as $110. The check was for the payment of an obligation to Targhee Supply Co. for a purchase on account.
E.	A check drawn for $680 had been erroneously charged by the bank as $860.
F.	Bank service charges for April amounted to $45.

	Instructions
1.	Prepare a bank reconciliation. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. “Deduct:” or “Add:” will automatically appear if it is required.
2.	Journalize the necessary entries. The accounts have not been closed. Refer to the Chart of Accounts for exact wording of account titles.
3.	If a balance sheet is prepared for American Medical Co. on April 30, what amount should be reported as cash?

Chart of Accounts

CHART OF ACCOUNTS

American Medical Co.

General Ledger

	ASSETS
110	Cash
111	Petty Cash
120	Accounts Receivable
131	Notes Receivable
141	Merchandise Inventory
145	Office Supplies
146	Store Supplies
151	Prepaid Insurance
181	Land
191	Office Equipment
192	Accumulated Depreciation-Office Equipment
193	Store Equipment
194	Accumulated Depreciation-Store Equipment

	LIABILITIES
211	Accounts Payable-Targhee Supply Co.
221	Notes Payable
222	Interest Payable
231	Salaries Payable
241	Sales Tax Payable

	EQUITY
310	Owner, Capital
311	Owner, Drawing
312	Income Summary

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Merchandise Sold
515	Credit Card Expense
516	Cash Short and Over
520	Salaries Expense
531	Advertising Expense
532	Delivery Expense
533	Insurance Expense
534	Office Supplies Expense
535	Rent Expense
536	Repairs Expense
537	Selling Expenses
538	Store Supplies Expense
561	Depreciation Expense-Office Equipment
562	Depreciation Expense-Store Equipment
590	Miscellaneous Expense
710	Interest Expense

Amount Descriptions

Amount Descriptions
Bank error in charging check as $680 instead of $860
Bank error in charging check as $860 instead of $680
Bank service charges
Check for $860 returned because of insufficient funds
Deposit of April 30, not recorded by bank
Error in recording check
Error in recording April 30 deposit
Outstanding checks
Note and interest collected by bank

Bank Reconciliation

1. Prepare a bank reconciliation. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. “Deduct:” or “Add:” will automatically appear if it is required. Whenever there is more than one adjusting item in the bank portion of the reconciliation or the general ledger portion of the bank reconciliation, enter in the order presented in the instructions.

AMERICAN MEDICAL CO.

Bank Reconciliation

April 30

1	Cash balance according to bank statement
2
3
4
5
6	Adjusted balance
7
8	Cash balance according to company’s records
9
10
11
12
13	Adjusted balance

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