Answer:
1. Adjusted cash balance equals the adjusted balance from the bank statement, totaling $133,620.
2. Refer to the journal entries and details provided in section 2 below.
Explanation:
The data presented in the question has been compiled and organized in the attached Excel document prior to answering the questions as follows:
1. Complete the bank reconciliation for December 31, 2019.
The bank reconciliation is shown in two formats:
a) Based on cash book balance
Gibson Energy Ltd.
Bank Reconciliation
as of December 31, 2019
Details Amount ($)
Cash book balance at December 31 awaiting reconciliation 62,000
Add:
Note receivable collected from XYZ Corp 80,000
Less:
Dishonored NSF check (7,000)
Overdraft interest expense (1,320)
Bank service charge (60)
Adjusted cash balance as of December 31 133,620
b) Based on bank statement balance
Gibson Energy Ltd.
Bank Reconciliation
as of December 31, 2019
Details Amount ($)
Bank statement balance at December 31 awaiting reconciliation 131,620
Add:
Cash deposited on December 9 yet to be recognized 85,000
Cash deposited on December 31 yet to be recognized 15,000
Check #52094 issued in error 62,000
Less:
Outstanding checks 233 (83,000)
Outstanding checks 239 (77,000)
Adjusted bank statement balance as of December 31 133,620
2. Document the journal entries needed to align the Cash in Bank account with the adjusted cash balance on the December 31 bank reconciliation, including explanations.
Date Account Title & Description DR ($) CR ($)
31 Dec 19 Cash 80,000
Note Receivable 78,049
Interest on Note Receivable 1,951
(To record note receivable & interest collected from XYZ)
31 Dec 19 Overdraft interest expense 1,320
Service charge 60
Cash 1,380
(To record interest expense and bank charges)
31 Dec 19 Accounts Receivable 7,000
Cash 7,000
(To record NSF check that was dishonored)
