Reference no: EM132462322

Problem - Bank Reconciliation and Entries

The cash account for American Medical Co. at April 30 indicated a balance of $10,080. The bank statement indicated a balance of $11,680 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 $4,200.

b. A deposit of $4,380, representing receipts of April 30, had been made too late to appear on the bank statement.

c. The bank collected $2,280 on a $2,160 note, including interest of $120.

d. A check for $880 returned with the statement had been incorrectly recorded by American Medical Co. as $800. 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 $60.

Required -

1. Prepare a bank reconciliation.

2. Journalize the necessary entries (a) that increase cash and (b) that decrease cash. The accounts have not been closed. For a compound transition, if an amount box does not require an entry, leave it blank.

3. If a balance sheet is prepared for American medical Co. on April 30, what amount should be reported as cash?