a. Checks outstanding totaled $7,840.
b. A deposit of $3,580, representing receipts of April 30, had been made too late to appear on the bank statement.
c. The bank collected $3,780 on a note left for collection. The face of note was $3,600.
d. A check for $770 returned with the statement had been incorrectly recorded by Remedy Medical Co. as $700. The check was for the payment of an obligation to Copelin Co. for a purchase on account.
e. A check drawn for $330 had been erroneously charged by the bank as $3,300.
f. Bank service charges for April amounted to $110.
Instructions
1. Prepare a bank reconciliation.
2. Journalize the necessary entries. The accounts have not been closed.
3. If a balance sheet were prepared for Remedy Medical Co. on April 30, 2014, what amount should be reported as cash?
Answers:
1.
REMEDY MEDICAL CO.
Bank Reconciliation
April 30, 2014
Cash balance according to bank statement $23,775
Add: Deposit of April 30, not recorded by bank $3,580
Bank error in charging check as $3,300 instead
of $330 2,970 6,550
$30,325
Deduct outstanding checks 7,840
Adjusted balance $22,485
Cash balance according to company’s records $18,885
Add proceeds of note collected by bank, including
$180 interest 3,780
$22,665
Deduct: Error in recording check $ 70
Bank service charges 110 180
Adjusted balance $22,485
2. Cash 3,780
Notes Receivable 3,600
Interest Revenue 180
Accounts Payable—Copelin Co. 70
Miscellaneous Expense 110
Cash 180
3. $22,485; the adjusted balance from the bank reconciliation should be reported
as cash on the April 30, 2014, balance sheet for Remedy Medical Co.