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

BANK RECONCILIATION STATEMENT
Balance as per bank statement				14038
Adjustment:
Add: Deposits in transit				2928
				16966
Less: Outstanding checks				2402
Adjusted balance as per bank statement				14,564
Balance as per Books				14600
Adjustment:
Add: Error in Recording utility bill				9
				14609
Less: Service charges				45
Adjusted balance as per books				14564
Journal entry:
Bank Service charges Dr.				45
Cash Account					45
Cash Account Dr.				9
Utility Expense Account					9