Prepare the adjusting journal entries that Del GAto Clinic must record as a result of preparing the bank reconciliation

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, 2015, its Cash accounts shows an $11,589 debit balance. Del Gato Clinic's June 30 bank statement shows $10,555 on deposit in the bank. Prepare a bank reconciliation for Del Gato Clinic using the following information:

a. Outstanding checks as of June 30 total $1,829.

b. The June 30 bank statement included a $16 debit memorandum for bank services.

c. Check No. 919, listed with the canceled checks, was correctly drawn for $467 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 $476.

d. The June 30 cash receipts of $2,856 were placed in the bank's night depository after banking hours and were not recorded on the June 30 bank statement.

Please refer to the explanations section

Explanation:

Bank Reconciliation is a process where we reconcile Business's cash books Balances and Bank account Balance.

Journal Entries

a. Dr Outstanding Checks $1829

   Cr           Bank (Bank Account Balance)                      $1829

Del Gato Clinic issued checks amounting to $1829 and The Bank has not processed these checks. This means Del Gato's Bank balance doesnot include the effect of these checks. The Bank account balance must be reduced by $1829

b. Dr Bank Charges expense $16

     Cr           Bank (cashbook balance)                         $16

Del Gato Clinic incurred an expense of $16 in Bank charges. Cashbook balance must reduced by $16.

c. Dr Bank (Bank account balance)   $476

   Cr        utility Bill Payment check  $476

   Dr Bank (Cashbook balance)   $476

   Cr        utility Bill Payment check   $476

check number 919 was cancelled but Del Gato Clinic mistakenly recorded it in the cashbooks and the bank processed the check. We need to adjust both Cash books and Bank account by processing a reversal journal entry debit Bank and credit Utility Bill payment

d. Dr Bank (Bank account balance) $2856

   Cr            Cash receipts        $2856

Del Gato Clinic placed cash receipts after banking hours, The Bank account balance must be increase by $2856 to reflect the effect of the receipts received

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