Question

The bank reconciliation prepared by Gatz Company on May 31, 2017, appeared as follows:

GATZ COMPANY
Bank Reconciliation
May 31, 2017
Bank statement balance		$9,264.35	Book balance		$19,429.00
Add:
Deposit of May 31 in transit		949.00
		$10,213.35
Deduct:			Deduct:
Outstanding cheques:			NSF cheque plus service
#876	$636.00		charge	$11,530.65
#882	1,744.00	2,380.00	Bank service charge	65.00	11,595.65
Adjusted bank balance		$7,833.35	Adjusted book balance		$7,833.35

The Cash account in the General Ledger appeared as follows on June 30 (Gatz uses only a General Journal to record transactions):

Cash					Acct. No. 101
Date	Explanation	PR	Debit	Credit	Balance
2017
May 31	Balance				7,833.35
June 1	Cheque #883	GJ16		1,847.00	5,986.35
1	Cheque #884	GJ16		107.00	5,879.35
3	Cheque #885	GJ16		618.00	5,261.35
4	Cheque #886	GJ16		1,917.00	3,344.35
9	Deposit	GJ16	4,579.00		7,923.35
12	Cheque #887	GJ16		425.15	7,498.20
12	Cheque #888	GJ16		3,138.00	4,360.20
12	Cheque #889	GJ16		936.00	3,424.20
18	Deposit	GJ16	3,879.00		7,303.20
20	Cheque #890	GJ16		2,537.00	4,766.20
21	Cheque #891	GJ16		1,406.24	3,359.96
24	Cheque #892	GJ16		2,492.00	867.96
26	Cheque #893	GJ16		71.00	796.96
29	Deposit	GJ16	1,745.00		2,541.96

The following bank statement is available for June:

Bank Statement
To: Gatz Company			June 30, 2017 Bank of Montreal
Cheques/Charges			Deposits/Credits		Balance
			05/31		9,264.35
#884	06/01	107.00	06/01	949.00	10,106.35
#883	06/04	1,847.00			8,259.35
#876	06/09	636.00	06/09	4,579.00	12,202.35
#889	06/12	936.00			11,266.35
#882	06/14	1,744.00			9,522.35
#887	06/18	245.15	06/18	3,879.00	13,156.20
#885	06/20	618.00			12,538.20
#891	06/21	1,046.24			11,491.96
#886	06/29	1,917.00			9,574.96
SC	06/30	72.00	06/30		9,502.96

NSF = Not Sufficient           Funds	SC = Service          Charge	PMT = Principal            Payment	INT = Interest

Required:
a. Prepare a bank reconciliation at June 30, 2017. Assume that any errors made were by the book keeper (cheque #887 was for office supplies; cheque #891 was for utilities expense). (Round the final answers to the nearest cent.)

	GATZ COMPANY Bank Reconciliation June 30, 2017 Bank Statement Company's Books Bank statement balance Book balance Add: Add: $0.00 $0.00 Deduct: Deduct: Outstanding cheques: 0.00 Adjusted bank balance Adjusted book balance

b. Prepare the necessary entries resulting from the bank reconciliation.

Journal entry worksheet

Record to account for error in Cheque #887.

Note: Enter debits before credits.

	Date General Journal Debit Credit Jun 30

Journal entry worksheet

Record to account for error in Cheque #891.

Note: Enter debits before credits.

	Date General Journal Debit Credit Jun 30

Journal entry worksheet

Record bank service charges for June.

Note: Enter debits before credits.

	Date General Journal Debit Credit Jun 30

Answer 1

Bank Reconcilation Statement as on june 30 (before passing rectification entries)

GATZ COMPANY Bank Reconciliation June 30, 2017 Bank Statement Company's Books Bank statement balance $9502.96 Book balance 2541.96 Add:Deposit of june 30 in transit $1745 Add:Cheque issued but not presented for payment Add:Bank service charges $72 888,890,892,893 $8238 Rectifiction entries to be pass for cheque no 887&891 $540 Total $1817.00 $8778.00 Deduct: Deduct: Outstanding cheques: Bank service charges not yet record in the books of account $72 #887 (Error) $180 Cheque deposited but yet not cleared $1745 #888 $3138 #890 $2537 #891(Error) $360 #892 $2492 #893 $71 Total $8778.00 Total $1817 Adjusted bank balance $2541.96 Adjusted book balance 9502.96

Journal entry worksheet

Record to account for error in Cheque #887.

	Date General Journal Debit Credit Jun 30 Bank A/c.............Dr $180 To Office Supplies A/c $180 (Being office supplies expenses account wrongly debited with $425.15 insted of $245.15, same is rectified)

Record to account for error in Cheque #891.

	Date General Journal Debit Credit Jun 30 Bank Account.......Dr $360 To Utilities expenses account $360 (Being utilities expenses account wrongly debited with $1406.24 insted of $1046.24,same is rectified)

Record bank service charges for June.

	Date General Journal Debit Credit Jun 30 Bank Charges A/c.......Dr $72 To Bank A/c $72 (Being Bank charges for june recorded)