Answer:
1. Adjusted bank balance $112,250
Adjusted cash balance $112,250
2.April 30
Dr Cash $24,075
Cr Note receivable $22,500
Cr Interest revenue $1,575
April 30
Dr Accounts payable - Targhee Supply Co $1,530
Cr Cash $1,530
April 30
Dr Bank service charges $70
Cr Cash $70
3. $112,250
Explanation:
1. Preparation of a bank reconciliation
AMERICAN MEDICAL CO.
Bank ReconciliationApril 30
Cash balance according to bank statement $125,160
Add Deposit in transit $18,000
Add Correction of bank error $630
Less Checks outstanding totaled ($31,540)
Adjusted balance $112,250
Cash balance according to company’s records $89,775
Add Bank collection of note and interest 24,075
Less Bank service charges ($70)
Correction of book error ($1,530)
Adjusted balance $112,250
2. Preparation of the journal entries
April 30
Dr Cash $24,075
Cr Note receivable $22,500
Cr Interest revenue $1,575
($24,075-$22,500)
April 30
Dr Accounts payable - Targhee Supply Co $1,530
Cr Cash $1,530
April 30
Dr Bank service charges $70
Cr Cash $70
3. Based on the bank reconciliation the amount that should be reported as cash will be $112,250
