The Following Information Is Available for Jade Company for the Month

question 139

Multiple Choice

The following information is available for Jade Company for the month ending June 30, 2017. * Balance as per the bank statement is $12,000.
* Balance as per books is $10,100.
* Check #506 for $1,100 and check #510 for $700 were not shown on the June 30, bank statement.
* A deposit in transit of $1,833 had not been received by the bank when the bank statement was generated.
* A bank debit memo indicated an NSF check for $80 written by Jane Smith to Jade Company on June 13.
* A bank credit memo indicated a note collected by the bank of $2,000 and interest revenue of $53 on June 20.
* The bank statement indicated service charges of $40.
What is the adjusted book balance?

• A) $12,073
• B) $12,033
• C) $8,353
• D) $8,300

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Definitions:

Effective Interest Method

A method of calculating the amortized cost of a bond and the amount of interest expense over the life of the bond by applying the effective interest rate to the carrying amount of the bond.

Accrued Interest

Interest that has been earned but not yet received or recorded as payment, often associated with loans or bonds.

Bond Sinking Fund

A fund set up by an issuer of a bond in which money is saved over time for the sole purpose of redeeming or buying back some or all of the bonds prior to their maturity.

Bond Sinking Fund

A method employed by issuers of bonds to set aside money over time to retire their debt at maturity.