Question

Del Gato Clinic deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on June 30, 2017, its Cash account shows a $14,600 debit balance. Del Gato Clinic's June 30 bank statement shows $14,038 on deposit in the bank.

a. Outstanding checks as of June 30 total $2,402.

b. The June 30 bank statement lists a $45 service charge.

c. Check No. 919, listed with the canceled checks, was correctly drawn for $289 in payment of a utility bill on June 15. Del Gato Clinic mistakenly recorded it with a debit to Utilities Expense and a credit to Cash in the amount of $298.

d. The June 30 cash receipts of $2,928 were placed in the bank's night depository after banking hours and were not recorded on the June 30 bank statement.

Prepare the adjusting journal entries that Del Gato Clinic must record as a result of preparing the bank reconciliation.

Answer 1

A bank reconciliation statement, also known as a BRS, is a form of financial statement that is created by a financial expert to compute the total balance of an organization's cash book and pass book. A bank reconciliation statement is used to reconcile the balances of the passbook and the cash account.

Bank cash balance	Amount$	Company cash balance	Amount$
Ending balance	14,038	Ending balance	14,600
Add : outstanding cash receipt	2,928	Add : Incorrect recording	9
Less : oustanding checks	2,402	Less : Service charge	45
Total	14,564	Total	14,564

 

Date	Particulars	Debit$	Credit$
(a)	No Entry required
(b)	Miscellaneous Expenses A/C	45
	To Cash A/C		45
	(To record bank service charges)
(c)	Cash A/C	9
	To utilities expense A/C		9
	(To record incorrect amount rectified)
(d)	No Entry required

answer to the above question clearly shown in the explanation option