Reference no: EM133136351

Question - Calculate the balance of cash using a bank reconciliation - On October 31, 2024, Gibson Company's general ledger shows a cash account balance of $8,439. The company's cash receipts for the month total $74,600, of which $71,365 has been deposited in the bank. In addition, the company has written checks for $72,509, of which $71,234 has been processed by the bank.

The bank statement reveals an ending balance of $12,749 and includes the following items not yet recorded by Gibson: bank service fees of $290, note receivable collected by the bank of $6,400, and interest earned on the note of $1,020. After closer inspection, Gibson realizes that the bank incorrectly charged the company's account $860 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.