Bank reconciliation and entries
1. Adjusted balance: $ 189,281
The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $166,436. The bank statement indicated a balance of $195,688 on June 30, 20Y1. Comparing the bank statement and the accompanying cancelled checks and memos with the records revealed the following reconciling items:
a. Checks outstanding totaled $19,427.
b. A deposit of $ 12,300, representing receipts of June 30, had been made too late to appear on the bank statement.
c. The bank collected $26,500 on a $25,000 note, including interest of $1,500.
d. A check for $4,000 returned with the statement had been incorrectly recorded by Pala Medical Co. as $400. The check was for thepayment of an obligation to Skyline Supply Co. for a purchase on account.
e. A check drawn for $195 had been erroneously charged by the bank as $915.
f. Bank service charges for June amounted to $55.
Instructions
1. Prepare a bank reconciliation.
2. Journalize the necessary entries.
3. If a balance sheet were prepared for Pala Medical Co. on June 30, 20Y1, what amount should be reported as cash?