Question

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.

Answer 1

CASH

Balance 166,436

Service Charge -55

mistake -3.600

collection 26,500

Adjusted Balance 189281.00

BANK

Balance 195,688

Outstanding Check -19,427

Deposit in transit 12,300

mistake 720

Adjusted Balance 189,281.000

Step-by-step explanation:

We adjust for mistake and unknow information for each party:

Bank:

the deposit in transit and the outstanding check are not know by the bank so we adjust like if they know about it.

Then, we have a mistake as the bank deducted 915 while it was 195

So, we add the 915 errneously charded and subtract the correct 195 giving plase to a 720 misktake

The company will adjust for the service charge and their collectiong in his behalf which, are unknow to theirs until receiving the bank statement.

Last the mistake will add un the 400 from the account and remove the 4,000 which is the true value giving place to a decrease in the maginitude of 3,600 in the adjustment.