Question

Del Gato Clinic's cash account shows a $16,565 debit balance and its bank statement shows $16,119 on deposit at the close of business on June 30.

1. Outstanding checks as of June 30 total $2,614.
2. The June 30 bank statement lists a $45 bank service charge.
3. Check No. 919, listed with the canceled checks, was correctly drawn for $789 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 $798.
4. The June 30 cash receipts of $3,024 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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Solution:

Del Gato Clinic
Bank Reconciliation
June 30,
Bank Statement Balance	$16,119
Add: Deposit in transit	$3,024
	$19,143
Less: Outstanding checks	$2,614
Adjusted Bank Balance	$16,529
Cash Balance per Company's Records	$16,565
Add: Company error in recording check as 798 instead of 789	$9
	$16,574
Less: Bank Service Charges	$45
Adjusted Cash Balance	$16,529

Journal Entries
S.No	Particulars	Debit	Credit
1	No journal entry required.
2	Miscellaneous Expenses	$45
	Cash		$45
	(To record bank service charges debited by bank)
3	Cash	$9
	Utilities expesnes		$9
	(To correct error in recording check for utility bill)
4	No journal entry required.