At the end of the month, the bank statement received by Gelato Company indicated

Question

At the end of the month, the bank statement received by Gelato Company indicated a final balance of S60,000 in Gelato Company's bank account. The balance in the cash account according to the Gelato Company's records was S56,000 on the same date. A review of activity indicated that the company had written S3,000 of checks that had not cleared the bank by the end of the month. Additionally, the company had made deposits to the bank account of S7,000 that did not clear before the bank statement was prepared. The bank statement indicated that the bank collected a note receivable on behalf of Gelato Company in the amount of $11,000, of which $10,000 was the principal of the note and $1,000 was interest earned on the note. The bank had mistakenly deducted from Gelato's account a S1,000 check written by Delgado Company The bank assessed a service charge of S50 for the month. Ima Ratt's check was returned with the bank statement, $1,950. The check was in payment of Ratt's account receivable. In good form, prepare a bank reconciliation for Gelato Company the end of the month (March 31,2018). Also, prepare any journal entries that Gelato would need to make as a result of the reconciliation.

Explanation / Answer

Journal entry

Gelato Company Bank Reconciliation March 31, 2018 Bank Statement Company's Book Ending balance as per bank statement $ 60,000 Ending balance as per general ledger   $ 56,000 Additions Additions Deposit in transit   $ 7,000 Note received by bank $ 10,000 Wrongly deducted by bank $ 1,000 Interest income   $    1,000 $    8,000 $ 11,000 Deductions Deductions NSF Check $    1,950 Outstanding checks   $    3,000 Bank service charges $          50 $    2,000 Bank balance per reconciliation $ 65,000 Cash balance per reconciliation $ 65,000

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.