CHAPTER 7 Internal Control and Cash Problem 7-5A Preparation of bank reconciliation and recording adjustments L06 CHECK FIGURE: Adjusted book balance-52.401.54 The bank reconciliation prepared by Gatz Company on May 31, 2020, appeared as follows: Gate Company Bank Reconciliation May 31, 2020 $9.564 35 Book balance 520 Bank statement balance Add Deposit of May 31, in transit 982.17 $10.546 52 Deduct NSF cheque plus service charge Bank service charge Adjusted book balance Deduct Outstanding cheques #876 #882 Adjusted bank balance $11.900.50 55.00 $ 655 99 1.800.00 2.455.99 5 8.090.53 The Cash account in the general ledger appeared as follows on June 30 (Gatz uses only a general jou record transactions): Cash PR Acct. No. 101 Balance Debit Credit Date Explanation 2020 May 31 June 1 1 1.865,30 112.70 650.84 2,018.45 GJ16 GJ16 GJ16 GJ16 GJ16 3 4 4,285 26 9 8,090.53 6.225.23 6.112.53 5,461.69 3.443.24 7,728.50 7,303.35 4,262.75 3,288,63 6,804.23 4,164.23 2,757.99 12 GJ16 GJ16 Balance Cheque #883 Cheque #884 Cheque #885 Cheque #886 Deposit Cheque #887 Cheque #888 Cheque #889 Deposit Cheque #890 Cheque #891 Cheque #892 Cheque #893 Deposit 425.15 3.040.60 974.12 12 12 GJ16 3,515.60 18 20 GJ16 GJ16 21 GJ16 GJ16 2.640.00 1,406.24 2.590.81 75.99 24 167.18 26 GJ16 GJ16 91.19 1,936.54 29 1,845.35 Internal Control and Cash The following bank statement is available for June: Bank Statement To: Gatz Company June 30, 2020 Bank of Montreal Cheques/Charges Deposits/Credits 05/31 06/01 982.17 06/09 4.285.26 #884 06/01 #883 06/04 #876 06/09 #889 06/12 #882 06/14 #887 06/18 #885 06/20 #891 06/21 #886 06/29 SC 06/30 NSF = Not Sufficient Funds Balance 9,564.35 10.433.82 8,568.52 12.197.79 11.223,67 9.423.67 12.694.12 12,043.28 10.997.04 8.978.59 8,903.59 INT Interest 112.70 1.865.30 655.99 974.12 1.800.00 245.15 650.84 1.046.24 2.018.45 75.00 SC = Service Charge 06/18 3,515,60 06/30 PMT= Principal Payment Required a. Prepare a bank reconciliation at June 30, 2020. Assume that any errors made were by the bookkeeper (cheque #887 was for office supplies; cheque #891 was for utilities expense). b. Prepare the necessary entries resulting from the bank reconciliation. av af urinh