Check the attached word document.
accountingbusiness
ATTACHED FILE(S)
Ch. 7
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 canceled 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 the payment 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.
Required:
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?
CHART OF ACCOUNTS
Pala 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-Skyline Supply Co.
221
Notes Payable
222
Interest Payable
231
Salaries Payable
241
Sales Tax Payable
EQUITY
310
Common Stock
311
Retained Earnings
312
Dividends
REVENUE
410
Sales
610
Interest Revenue
EXPENSES
510
Cost of Goods 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
Labels and Amount Descriptions
Labels
For the Month Ended June 30, 20Y1
June 30, 20Y1
Amount Descriptions
Adjusted balance
Bank error in charging check as $915 instead of $195
Bank service charges
Deposit in transit on June 30
Error in recording check
Note collected by bank, including $1,500 interest
Outstanding checks
Total additions
Total deductions
Bank Reconciliation
1. Prepare a bank reconciliation.
Bank Reconciliation Instructions
Pala Medical Co.
Bank Reconciliation
1
Cash balance according to bank statement
2
3
4
5
6
7
8
Cash balance according to company’s records
9
10
11
12
13
General Journal
2. Journalize the necessary entries.
General Journal Instructions
PAGE 1
JOURNAL
ACCOUNTING EQUATION
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
ASSETS
LIABILITIES
EQUITY
1
2
3
4
5
6
Final Question
3. If a balance sheet were prepared for Pala Medical Co. on June 30, 20Y1, what amount should be reported as cash?
Part 2
The
cash
account for Coastal Bike Co. at October 1, 20Y9, indicated a balance of $5,140. During October, the total cash deposited was $39,175, and checks written totaled $40,520. The
bank statement
indicated a balance of $8,980 on October 31, 20Y9. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items:
a.
Checks outstanding totaled $3,260.
b.
A deposit of $2,450 representing receipts of October 31 had been made too late to appear on the bank statement.
c.
The bank had collected for Coastal Bike Co. $5,300 on a note left for collection. The face of the note was $5,000.
d.
A check for $460 returned with the statement had been incorrectly charged by the bank as $640.
e.
A check for $430 returned with the statement had been recorded by Coastal Bike Co. as $340. The check was for the payment of an obligation to Rack Pro Co. on account.
f.
Bank service charges for October amounted to $50.
g.
A check for $605 from Bay View Condos was returned by the bank due to insufficient funds.
Required:
1.
Prepare a bank reconciliation as of October 31, 20Y9.
2.
Journalize the necessary entries.
3.
If a balance sheet were prepared for Coastal Bike Co. on October 31, 20Y9, what amount should be reported as cash?
Chart of Accounts
CHART OF ACCOUNTS
Coastal Bike Co.
General Ledger
ASSETS
110
Cash
111
Petty Cash
112
Accounts Receivable-Bay View Condos
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-Rack Pro Co.
221
Notes Payable
222
Interest Payable
231
Salaries Payable
241
Sales Tax Payable
EQUITY
310
Common Stock
311
Retained Earnings
312
Dividends
REVENUE
410
Sales
610
Interest Revenue
EXPENSES
510
Cost of Goods 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
Labels and Amount Descriptions
Labels
For the Month Ended October 31, 20Y9
October 31, 20Y9
Amount Descriptions
Adjusted balance
Bank error in charging check as $640 instead of $460
Bank service charges
Check returned because of insufficient funds
Deposit in transit on October 31
Error in recording check
Note collected by bank, including $300 interest
Outstanding checks
Total additions
Total deductions
Bank Reconciliation
1. Prepare a bank reconciliation as of October 31, 20Y9.
Bank Reconciliation Instructions
Coastal Bike Co.
Bank Reconciliation
1
Cash balance according to bank statement
2
3
4
5
6
7
8
Cash balance according to company’s records
9
10
11
12
13
14
General Journal
2. Journalize the necessary entries.
General Journal Instructions
PAGE 1
JOURNAL
ACCOUNTING EQUATION
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
ASSETS
LIABILITIES
EQUITY
1
2
3
4
5
6
7
Final Question
3. If a balance sheet were prepared for Coastal Bike Co. on October 31, 20Y9, what amount should be reported as cash?
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