Question

Gord Inc.’s cash T-account had a balance of $2,800 at December 31; however, Gord’s bank statement...

Gord Inc.’s cash T-account had a balance of $2,800 at December 31; however, Gord’s bank statement showed a balance of $3,100. The bank statement included service charges of $20, $15 of interest revenue, and a $500 EFT collection from a customer, none of which was reflected in Gord’s T-account. Gord’s records showed checks of $200 and deposits of $395 that were not on the bank statement.

a. Prepare Gord’s bank reconciliation at December 31, as well as all necessary adjusting journal entries Gord will have to make as a result of the reconciliation.

b. How much will Gord report for cash on the December 31 Balance Sheet?

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Answer #1

a)

Bank reconcilation
Balance as per Bank 3100 Balance as per book 2800
Add:Deposit in transit 395 Add:EFT 500
less:Outstanding checks (200) Interest revenue 15
less:service charge (20)
Adjusted Balance as per Bank 3295 Adjusted balance as per book 3295
Date Account title Debit credit
1 Cash 500
Accounts receivable 500
[EFT recorded]
2 cash 15
Interest revenue 15
3 Bank service charge 20
cash 20

b) Gord report for cash on the December 31 Balance Sheet :3295

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