Del Gato Clinic's cash account shows a $15,307 debit balance and its bank statement shows $13,567 on deposit at the close of business on June 30. Outstanding checks as of June 30 total $1,199. The June 30 bank statement lists a $15 bank service charge. Check No. 919, listed with the canceled checks, was correctly drawn for $389 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 $398. The June 30 cash receipts of $2,933 were placed in the bank’s night depository after banking hours and were not recorded on the June 30 bank statement. 1.Prepare its bank reconciliation using the above information.

Answer and Explanation:

The preparation of the bank reconciliation is presented below:

                                   Del Gato Clinic's

                      Bank reconciliation statement  

                                             June 30

Particulars               Amount               Particulars                    Amount  

Bank cash balance $13,567           Company cash balance  $15,307

Add: Deposits                                  Add: Recording error      $9

in transit                   $2,933              

Less: Outstanding                            Less: service fee          -$15

Check                        - $1,199

Bank balance                                   Company balance

After reconciliation $15,301              After reconciliation $15,301

The recording error is come from

= $398 - $389

= $9

And we do the adjustment accordingly that increased and decreased the company cash and bank cash balance

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explanation:

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