Question

Gibson Energy Ltd.'s general ledger account for Cash in Bank showed the following at December 31, 2019: Cash in Bank Acct. No. 101 Balance DR CR Folio Date Nov. 30 Dec. 1-31 Cash receipts Dec. 1-31 Cash Payments Description Balance (overdraft) Debit Credit CRJ10 CDJ21 221,000 1,034,000 62,000 813,000 972,000 December deposits made and checks issued were as follows Deposits Checks Date Amount No. Amount 30,000 210,000 85,000 Dec. 5 232 233 12 15 21 24 26 28 31 110,000 83,000 25,000 59,000 590,000 17,000 28,000 77,000 26,000 420,000 16,000 51,000 21,000 15,000 235 236 237 238 239 $813,000 972,000

Answer 1

1. Prepare the bank reconciliation at December 31, 2019 as shown belovw GE Ltd Bank Reconciliation At December 31, 2019 Particulars Amount Particulars Amount Ureconciled general ledger cash balance at Dec 31 Add: Note Receivable from collected from XYZ Unreconciled bank statement S62,000 balance at Dec 31 S131,620 Add: Cash deposit of Dec 9th not yet 80,000 credited $85,000 Cash deposit of Dec 31 not yet credited Check #52094 wrongly drawn S15,000 S62,000 Less NSF check dishonoured Overdraft interest e Bank Service fees Adjusted general ledger cash balance at Dec 31 ess: $7,000 Less: S1,320 Ck. 233 checks $83,000 S77,000-$160,000 se -S60 Ck. 239 Adjusted bank statement balance $133.620 at Dec 31 $133,620

Record the adjusting journal entries required to adjust cash balance on 31 December as follows: Post Ref. Debit (S) Credit (S) Date Account title and explanation 31-Dec-19 Cash 80,000 Note Receivables Interest on Note Receivable 78,049 1,951 (To record entry for notes receivable collected from XYZ corp, with interest 1,320 60 31-Dec-19 Overdraft interest expense Service Charges Cash 1,380 (To record entry for interest expense and bank charges 31-Dec-19 Account Receivable 7,000 Cash 7,000 (To record entry for NSF check)