Question

Del gato clinic's cash account shows an $16,600 debit balance and its bank statement shows $16,821 on deposit at the close of business on june 30. outstanding checks as of june 30 total $2,745. the june 30 bank statement lists a $100 bank service charge. check no. 919, listed with the canceled checks, was correctly drawn for $589 in payment of a utility bill on june 15. del gato clinic mistakenly recorded it with a debit to utilities expense and a credit to cash in the amount of $598. the june 30 cash receipts of $2,433 were placed in the bank's night depository after banking hours and were not recorded on the june 30 bank statement. What is the adjusted balance of Del Gato Clinic's cash account as of June 30?

1) $16,600
2) $16,821
3) $16,721
4) $16,721

Answer 1

The adjusted balance of Del Gato Clinic's cash account as of June 30 is $16,418 after accounting for outstanding checks, unrecorded cash receipts, a bank service charge, and correcting a recording error. The correct answer is approximately option 4.

Step-by-step explanation:

To determine the adjusted balance of Del Gato Clinic's cash account as of June 30, we need to perform a bank reconciliation process which involves adjusting the balance per books (company's records) and the balance per bank (bank statement) to reflect the true amount of cash. The following adjustments should be made:

1. Subtract the outstanding checks from the bank statement balance.
2. Add the cash receipts that were not recorded on the bank statement because they were deposited after banking hours.
3. Correct the error made in recording check no. 919.
4. Subtract any bank service charges.

Here is how we can calculate the adjusted balance:

• Subtract outstanding checks: $16,821 - $2,745 = $14,076.
• Add the June 30 cash receipts: $14,076 + $2,433 = $16,509.
• Correct the recording error: Since we credited cash with $598 instead of $589, we need to add back the difference of $9 ($598 - $589) to the cash balance to correct this: $16,509 + $9 = $16,518.
• Subtract the bank service charge: $16,518 - $100 = $16,418.

Therefore, the adjusted balance of Del Gato Clinic's cash account as of June 30 is $16,418, which is not one of the options provided in the question. There seems to be a typo or mistake in the multiple-choice answers given. If we assume option 4 is meant to be $16,418 instead of $16,721, then option 4 would be the correct adjusted balance.