BANK RECONCILIATION ELLOIT'S RETAIL OUTLET MONTH OF FEBRUARY Elloit's Retail Outlet keeps a checking accounting with their local bank. Elloit's practice is to deposit daily cash receipts at the end of the week in their checking account. The following information is from the company's records regarding cash receipts, deposits and checks written: 214 Date Amount No. Date Amount Deposits: $2.700 Checks: 321 2/2 $4,700 2/11 2.300 3222/8 400 2/18 3.200 323 2/12 2,500 2/25 4.100 3242/19 2,200 Cash-receipts 2/26-2/28 1,600 325 2/27 200 $13.900 3262/28 700 3272/28 1,900 Balance on 2/1 $6.800 $12.600 Receipts 13.900 Disbursements (12.600) Balance 2/28 S. 8.100 Information from February's bank statement and company records reveals the following additional Information: a. The ending cash balance recorded in the bank statement is $13,145. b. Cash receipts of $1,600 from 2/26-2/28 are outstanding. c. Checks 325 and 327 are outstanding. d. The deposit on 2/11 Includes a customer's check for 200 that did not clear the customer's bank-NSF check. e. Check 323 was written for $2,800 for advertising in February. The bank properly recorded the check for this amount. t. An automatic withdrawal for Ellolt's February rent was made on February 4 for $1,100. g. Ellolt's checking account earns Interest based on the average dally balance. The amount of interest earned for February is $20. h. In January, one of Ellolt's suppliers, borrowed $6,000 from Ellolt. On February 24, the customer paid $6,250 ($6,000 borrowed amount plus $250 Interest) directly to Ellole's checking account at the bank to repay the loan. 1. Ellole's bank charged service fees of $125 for the month of February. Required: 1. Prepare a bank reconciliation for Ellolt's checking account as of February, 28". 2. Record any needed entries for Elloit's based on the information in the completed bank reconciliation Requiremont 1 Ellolt's Retail Outlet Bank Reconciliation February 28 Bank's Cash Balance Per bank statement Company's Cash Balance Per general ledger Bank balance per reconciliation Company balance per reconciliation Requirement 2 Account Debit Credit I Valuation of Accounts Receivable A. The following information relates to Alpha Co.'s Accounts Receivable: 1. Beginning of year Accounts Receivable balance $ 300,000 2. Beginning of year allowance for uncollectible accounts ($25,000) 3. Credit Sales during the year 1,500,000 4. Write-offs of Accounts Receivable during the year 16,000 5. Cash collected from Accounts Receivable 1,450,000 Alpha Co. estimates that bad debts will be 2% of credit sales. Required: 1. Calculate bad debts expense for the year. 2. Calculate the year-end balance in the Allowance for Uncollectible Accounts account B. The following information relates to Johnson Co.'s Accounts Receivable: Johnson Co. uses the allowance method to account for uncollectible accounts receivable. Bad debt expense is established as a percentage of credit sales. For the current year net credit sales totaled $4,500,000 and the estimated bad debt percentage is 1.5%. The allowance for uncollectible accounts had a credit balance of $42,000 at the beginning of the year and $40,000, after adjusting entries, at the end of the year. Required: 1. What is bad debt expense for the year? 2. Determine the amount of accounts receivable written off during the year
