Bank Reconciliation and Entries
The cash account for American Medical Co. at April 30 indicated a balance of $13,160. The bank statement indicated a balance of $15,520 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:
Required:
1.Prepare a bank reconciliation.
1. Set up two columns: one for the company cash account section and the other for the bank balance section. Determine the effect of the data on each column. Recall that when you are finished, the adjusted balances in the bank and company sections of the reconciliation must be equal. If not, an item has been overlooked or treated in error.
2.Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. For a compound transaction, if an amount box does not require an entry, leave it blank.
2. Keep in mind that the company needs to journalize any adjusting items in the company section of the bank reconciliation, because these have not been previously recorded by the company. Debit memo items like bank service charges decrease Cash. Items that come from credit memos like collections of notes or interest by the bank increase cash. If the company made an error that overstates or understates cash in the company section, the journal adjustment would decrease Cash or increase Cash, respectively.
3.If a balance sheet is prepared for American Medical Co. on April 30, what amount should be reported as cash?$fill in the blank e116c7fc5fbc06f_1
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