The Bank Statement for Gatlin Co

question 108

Essay

The bank statement for Gatlin Co. indicates a balance of $7,735 on June 30. After the journals for June had been posted, the cash account had a balance of $4,098.?
(a)Cash sales of $742 had been erroneously recorded in the cash receipts journal as $724.
(b)Deposits in transit not recorded by bank, $425.
(c)Bank debit memo for service charges, $35.
(d)Bank credit memo for note collected by bank, $2,475 including $75 interest.
(e)Bank debit memo for $256 NSF
(not sufficient funds) check from Janice Smith, a customer.
(f)Checks outstanding, $1,860.?Record the appropriate journal entries that would be necessary for Gatlin Co.

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Definitions:

Noncash Financing

Activities that increase long-term liabilities or equity but do not involve the immediate receipt or payment of cash, such as issuing stock or converting debt to equity.

Retirement Of Debt

The process through which a company repays or otherwise settles its outstanding debts.

Note Payable

A written promise to pay a specified amount of money, often with interest, by a certain date.

Common Stock

Shares issued by a corporation representing partial ownership in the company, entitling holders to vote on corporate matters.