On October 31, 2024, Gibson Company's general ledger shows a cash account balance of $8,448. The company's cash receipts for the month total $74,660, of which $71,380 has been deposited in the bank. In addition, the company has written checks for $72,518, of which $71,288 has been processed by the bank. The bank statement reveals an ending balance of $12,968 and includes the following items not yet recorded by Gibson: bank service fees of $320, note receivable collected by the bank of $6,700, and interest earned on the note of $1,170. After closer inspection, Gibson realizes that the bank incorrectly charged the company's account $980 for an automatic withdrawal that should have been charged to another customer's account. The bank agrees to the error. Required: 1. Prepare a bank reconciliation to calculate the correct ending balance of cash on October 31, 2024. 2. Record the necessary entries to adjust the balance for cash. Complete this question by entering your answers in the tabs below.
On October 31, 2024, Gibson Company's general ledger shows a cash account balance of $8,448. The company's cash receipts for the month total $74,660, of which $71,380 has been deposited in the bank. In addition, the company has written checks for $72,518, of which $71,288 has been processed by the bank. The bank statement reveals an ending balance of $12,968 and includes the following items not yet recorded by Gibson: bank service fees of $320, note receivable collected by the bank of $6,700, and interest earned on the note of $1,170. After closer inspection, Gibson realizes that the bank incorrectly charged the company's account $980 for an automatic withdrawal that should have been charged to another customer's account. The bank agrees to the error. Required: 1. Prepare a bank reconciliation to calculate the correct ending balance of cash on October 31, 2024. 2. Record the necessary entries to adjust the balance for cash. Complete this question by entering your answers in the tabs below.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On October 31, 2024, Gibson Company's general ledger shows a cash account balance of $8,448. The company's cash receipts for
the month total $74,660, of which $71,380 has been deposited in the bank. In addition, the company has written checks for $72,518, of
which $71,288 has been processed by the bank.
The bank statement reveals an ending balance of $12,968 and includes the following items not yet recorded by Gibson: bank service
fees of $320, note receivable collected by the bank of $6,700, and interest earned on the note of $1,170. After closer inspection,
Gibson realizes that the bank incorrectly charged the company's account $980 for an automatic withdrawal that should have been
charged to another customer's account. The bank agrees to the error.
Required:
1. Prepare a bank reconciliation to calculate the correct ending balance of cash on October 31, 2024.
2. Record the necessary entries to adjust the balance for cash.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Prepare a bank reconciliation to calculate the correct ending balance of cash on October 31, 2024. (Amounts to be deducted
should be indicated with a minus sign.)
Bank's Cash Balance
Per bank statement
Deposits outstanding
Bank error
Checks outstanding
Bank balance per reconciliation
$
$
Bank Reconciliation
October 31, 2024
Company's Cash Balance
12,968 Per general ledger
3,220 Note received
820
Interest earned
(1,290)
Service fees
15,426 Company balance per reconciliation
Required 2 >
< Required 1
8,436
6,300
970
(280)
15,426
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