Problem 9.8A Preparing a bank reconciliation statement and journalizing entries

Question

Problem 9.8A Preparing a bank reconciliation statement and journalizing entries to adjust the caslh balance. LO 9-9, 9-10, 9-11 On August 1, 2019, the accountant for Western Imports downloaded the company's July 31, 2019, bank statement from the bank's Website. The balance shown on the bank statement was $28,790. The July 31, 2019, balance in the Cash account in the general ledger was $13,909. Jenny Irvine, the accountant for Western Imports, noted the following differences between the bank's records and the company's Cash account in the general ledger. a. An electronic funds transfer for $14,700 from Foncier Ricard, a customer located in France, was received by the bank on July 31 b. Check 1422 was correctly written and recorded for $1,200. The bank mistakenly paid the check for $1,250. c. The accounting records indicate that Check 1425 was Issued for $60 to make a purchase of supplies. However, examination of the check online showed that the actual amount of the check was for $90. d. A deposit of $870 made after banking hours on July 31 did not appear on the July 31 bank statement. e. The following checks were outstanding: Check 1429 for $1,252 and Check 1430 for $144. f. An automatic debit of $265 on July 31 from CentralComm for telephone service appeared on the bank statement but had not been recorded in the company's accounting records. Required: 1. Prepare a bank reconciliation for the firm as of July 31. 2. Record general journal entries for the items on the bank reconiliation that must be journalized. Analyze: What effect on total expenses occurred as a result of the general journal entries recorded?

Explanation / Answer

WESTERN IMPORTS Bank Reconciliation statement 31-Jul-19 Balance on bank statement $ 28,790 Additions Bank mistake for customer payment $        50 Deposit in transit $     870 Total additions $        920 $ 29,710 Deduction Outstanding checks $ 1,396 Total deductions $    1,396 Adjusted bank balance $ 28,314 Balance in books $ 13,909 Additions Elctronic fund received $ 14,700 $ 28,609 Deductions Mistake in check 1425 recorded $        30 Telephone service expenses $     265 Total deductions $        295 Adjusted balance $ 28,314 1 Supplies $          30 cash $          30 2 No entry required 3 Telephone expenses $        265 Cash $        265 4 No entry required 5 No entry required 6 Cash $ 14,700 Accounts receivable $ 14,700

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