Gulf corporation deposits all of its cash and cheques received in the bank on the...
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Gulf corporation deposits all of its cash and cheques received in the bank on the same day and makes all cash payments by issuing a cheque. At the close of business on September 30, 2019, its Cash account shows a $7,000 debit balance. Gulf corporations September 30th bank statement shows $7,900 deposits in the bank. The following prospective reasons were discovered for difference in the balances.
The September 30th bank statement included a $120 debit memorandum for bank service charges.
Check No. 9881, listed with the cancelled check, was correctly drawn for $1,293 in payment of a utility expense on September 15th. Gulf corporation mistakenly recorded it with a debit to utilities expense and a credit to cash in the amount of $1,239.
Outstanding checks as of September 30th are total $2,674.
The September 30th cash receipts of $1,900 were placed in the banks night depository after banking hours and were not recorded on the September 30th bank statement.
It is noted in the bank statement that an amount of $300 is directly credited in the companys bank account as interest income, this has not been reported in the companys cash book.
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