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 an $12,286 debit balance. Del Gato Clinic’s June 30 bank statement shows $12,524 on deposit in the bank. Outstanding checks as of June 30 total $2,740. The June 30 bank statement lists a $95 service charge. Check No. 919, listed with the canceled checks, was correctly drawn for $589 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 $598. The June 30 cash receipts of $2,416 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

Bank reconciliation statement
Description	Amount
Balance as per Bank	12,524
Bank fee and charges	95
Canceled cheque	(598)
Canceled cheque	589
Deposit not yet reflected in the bank	2,416
Cheque not yet presented	(2,740)
total of above	12,286
Balance as per Cash account	12,286
Variance	-
Reconciling entries
Bank charges        Dr	95
To Bank a/c		95
(being service charges recorded)
Bank a/c        Dr	9
To Utility expense		9
(being service charges recorded)