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BONUS I (9 points): The following information pertains to Family Video Company: 1. Cash balance per bank, July 31, $7,263. 2. July bank service charge
BONUS I (9 points): The following information pertains to Family Video Company: 1. Cash balance per bank, July 31, $7,263. 2. July bank service charge not recorded by the depositor $28. 3. Cash balance per books, July 31, $7,284. 4. Deposits in transit, July 31, $1,500. 5. Bank collected $900 note for Family in July, plus interest $36, less fee of $20. The collection has not been recorded by Family, and no interest has been accrued 6. Outstanding checks, July 31, $591. Instructions: (a) Prepare a bank reconciliation at July 31. (b) Journalize the adjusting entries at July 31 on the books of Family Video Company. BONUS II (6 points): The ledger of Hixson Company at the end of the current year shows Accounts Receivable of $120,000, Sales $840,000, and Sales Returns and Allowances $30,000. Instructions: (a) If Hixson uses the direct write off method to account for uncollectible accounts, journalize the adjusting entry at December 31, assuming Hixson determines that Fell's $1,400 balance is uncollectible. (b) If Allowance for Doubtful Accounts has a credit balance of $2,100 in the trial balance, journalize the adjusting entry at December 31 assuming bad debts are expected to be 1% of net sales. (c) If Allowance for Doubtful Accounts has a debit balance of $200 in the trial balance, journalize the adjusting entry at December 31, assuming bad debts are expected to be 6% of accounts receivable
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