Accounting Lab
Bank Reconciliation The following data were accumulated for use in reconciling the bank account of Creative Design Co. for August 20Y6: 1. Cash balance according to the company's records at August 31, $24,140. 2. Cash balance according to the bank statement at August 31, $25,430. 3. Checks outstanding, $4,900. 4. Deposit in transit, not recorded by bank, $3,930. 5. A check for $480 in payment of an account was erroneously recorded in the check register as $840. 6. Bank debit memo for service charges, $40 a. Prepare a bank reconciliation, using the format shown in Exhibit 13. Creative Design Co. Bank Reconciliation August 31, 20Y6 Cash balance according to bank statement Adjusted balance Cash balance according to company's records Adjusted balanceEntries for Uncollectible Receivables, using Allowance Method Journalize the following transactions in the accounts of Zippy Interiors Company, a restaurant supply company that uses the allowance method of accounting for uncollectible receivables: May 24 Sold merchandise on account to Old Town Cafe, $18,000. The cost of goods sold was $13,000. Sept. 30 Received $3,600 from Old Town Cafe and wrote off the remainder owed on the sale of May 24 as uncollectible. Dec. 7 Reinstated the account of Old Town Cafe that had been written off on September 30 and received $14,400 cash in full payment. If an amount box does not require an entry, leave it blank. May 24-sale May 24-cost 100 Sept. 30 Dec. 7-reinstate Dec. 7-collection 00 00 000 0 00 00Providing for Doubtful Accounts At the end of the current year, the accounts receivable account has a debit balance of $784,000 and sales for the year total $8,890,000. a. The allowance account before adjustment has a debit balance of $10,600. Bad debt expense is estimated at 3/4 of 1% of sales. b. The allowance account before adjustment has a debit balance of $10,600. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $33,900 The allowance account before adjustment has a credit balance of $8,600 Bad debt expense is estimated at 1/4 of 1% of sales d. The allowance account before adjustment has a credit balance of $8,600 An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $71,400 5' Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above. Will Entries for Notes Receivable Valley Designs issued a 90-day, 6% note for $84,000, dated April 17, to Bork Furniture Company on account. Assume 360 days in a year when computing the interest. a. Determine the due date of the note. v b. Determine the maturity value of the note. ail: c1. Journalize the entry to record the receipt of the note by Bork Furniture. If an amount box does not require an entry, leave it blank. _3 % c2. Journalize the entry to record the receipt of payment of the note at maturity. If an amount box does not require an entry, leave it blank. ' [ _3 % ll m Outlaw Bike Co. is a wholesaler of motorcycle supplies. An aging of the company's accounts receivable on December 31, and a historical analysis of the percentage of uncollectible accounts in each age category are as follows: Age Class Balanoe Percent Unoollactlble Not past due $568,000 1/2 % 1-30 days past due 62,500 3 31-60 days past due 28,400 9 61-90 days past due 20,400 18 91-180 days past due 14,800 42 Over 180 days past due 10,800 75 $704,900 Estimate what the proper balance of the allowance for doubtful accounts should be as of December 31. Percent Estlmatad Uncollectlble Age Class Balance uncollectihle Accounts Amount Not past due $568,000 1/2% $ 1-30 days past due 62,500 3 31-60 days past due 28,400 9 61-90 days past due 20,400 18 91-180 days past due 14,800 42 Over 180 days past due 10,800 75 Total $704,900 $
