\\ And prepare journal entries for adjusting entries Robin hands you her Jan 30

Question

And prepare journal entries for adjusting entries

Robin hands you her Jan 30 bank statement and book balances and asks you to explain the discrepancies' below. She would like you to determine if the discrepancy belongs on the book or bank side of the reconciliation, explain if it caused the correlating balance to be over or understated, and prepare any necessary adjusting entries accordingly. The closing manager dropped off $20,000 in the nightly depository last night. Bank vs Book Side Effect on Bank Balance Effect on Book Balance Adjusting Entry Required? 4 The bank accepted a funds transfer of $30 for interest income that had not yet been accounted for Bank vs Book Side Effect on Bank Balance Effect on Book Balance Adjusting Entry Required? 10 14 15 C 16 17 The bank charged JSFD a $5.00 service charge for accepting foreign currency Bank vs Book Side Effect on Bank Balance Effect on Book Balance Adjusting Entry Required? 19 20 21 JSFD wrote a check for a utility bill for $520, but the check will be mailed to

Explanation / Answer

Step 1

Step 2 - Journal entries

Particulars Bank Vs Book Side Effect on Bank Balance Effect on book balance Adjusting Entry Required ? (A) Bank side Understated Bank side will not be effected till the cheque is credited by bank to robin's account (Understated) Book balance increased by $20000 No entry Required since it entered in books (B) Book side Understated Bank balance increased by $30 Book Balance is Understated since it is not entered in books Yes (C) Book balance Overstated Bank side will decreased by $5 Book balance is Overstated since it is not entered in books Yes (D) bank Balance overstated Bank balance is overstated since check is not cleared Book balance will decrease by $520 No. Since it is already entered in books (E) Book side Understated Bank balance increased by $12 Book Balance is Understated since it is not entered in books Yes (F) Book Balance Understated Bank Balance is correctly decreased by $50 (True Amount) Book Balance is understated by $450 ($500 - $50) Yes

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