Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

3. Prepare the bank reconciliation for Bombay, Inc., based on the following information: Balance per John Boys checkbook at December 31 $21,970 Balance per Bank

3. Prepare the bank reconciliation for Bombay, Inc., based on the following information:

Balance per John Boys checkbook at December 31 $21,970

Balance per Bank Statement at December 31 $18,900

Additional information

  1. A review of the bank statement indicates that the following checks written by Bombay had not cleared by the end of the month:

  1. #1234 $ 860
  2. #1236 1,200
  3. #1241 300

  1. Bombays deposit of $3,230 on December 31 was made after banking hours and was not reflected on the bank statement.

  1. The bank statement indicated $17 interest paid to Bombay and a bank service charge in the amount of $23.

  1. Bombay erroneously recorded check #1231 for $506. The amount correctly cleared by the bank was $560. The check was written for Telephone expenses.

Book Balance

Adjusted Book Balance

Thebankerroneously credited a $2,140 deposit made by John Boys to another customers account. The deposit was recorded correctly on John Boys books.

BOOK SIDE BANK SIDE

4. Jager, Inc. estimates it uncollectible accounts expense to be 2% of credit sales. During the current year it had total sales of $1,100,000 of which $100,000 were cash sales. At the end of the year the company had a $4,000 credit balance in it Allowance for Allowance for Uncollectible Accounts.

Estimate the Uncollectible Accounts Expense that Jager should show on its income statement for the current year.

The entry that should be made by Jager at December 31 is :

a. Debit Uncollectible Account Expense and Credit Acct. Rec. for $22,000

b. Debit Allowance for Uncollectible Accounts and Credit for Uncollectible Accounts

Expense for $20,000

c. Debit Uncollectible Accounts Expense and Credit Allowance for Uncollectible

Accounts for $20,000

d. Debit Allowance for Uncollectible Accounts and Credit Accounts Receivable for

$20,000.

5. Dewars, Inc. uses the aging method to estimate its uncollectible accounts expense for the year. At December 31, Dewars accountant prepared a partial aging analysis of accounts receivable.

Complete the aging analysis and record the year end adjustment for uncollectible accounts assuming that the creditbalance in the Allowance for Uncollectible Accounts prior to adjustment is $4,500.

/--------------------- Past Due -------------------/

Current 3060 61-90 91-120 >120

Total A/R 40,000 10,000 12,000 4,000 2,000

Uncollectible % 2% 5% 10% 20% 50%

Total Estimated Uncollectible Accounts Receivable __________

The entry that should be made by Jager at December 31 is:

6. Bacardi Corporation was notified by one of its customers that it would be unable to pay Bacardi the $5,000 it owed for the purchase of merchandise several months. Bacardi agreed to accept a ninety day6% note receivable for the balance.

a. Prepare the entry to record the note receivable.

b. Calculate the interest to be paid to Bacardi at maturity. Use a 360 day year.

c. Prepare the entry to record Bacardis receipt of the payment, including interest, on the ninetieth day.

ANSWER 3, 4, 5, 6.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Ethics

Authors: Ronald F. Duska, Brenda Shay Duska, Kenneth Wm. Kury

3rd Edition

1119118786, 9781119118787

More Books

Students also viewed these Accounting questions

Question

=+1. Do you have insurance?

Answered: 1 week ago

Question

=+ 2. Do you have a license and do you have insurance?

Answered: 1 week ago