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00000 vodafone AU 3G J:F9:31 CI} 0 95% -' mood|e.uow;3latform.edu.au 1/2 WUCB 104 -Assignment 1: Week 4 QUESTION 1 On 31 May 2013, the Cash at Bank account of Nicky Shop had a balance of $2,827.75. The bank statement of May 2013 indicated a balance of $5,056.25. Comparison of cheque records and bank advices revealed the following: 1. Deposit in transit 31 May totalled $1,750.00 2 Outstanding cheques 31 May totalled $2,725.50 3. The bank added to the account $20.00 interest income earned by Nicky Shop during May 4 . The bank collected a $1,600 note receivable for Nicky Shop and charged a $15.00 collection fee. Both transactions appear on the bank statement. 5. Bank service charges amounting to $18 appear on the bank statement but are not yet recorded on the books. 6. The bank has returned a cheque indicating that Allin's cheque for $245 had been returned as a non-sufficient fund cheque. Allin had sent the cheque to pay an account of $250 less a 2% discount. 7. Nicky Shop recorded the payment of an account payable as $233; the cheque was for $322. Required: 3) Prepare bank reconciliation for Nicky Shop as of 31 May 2013. b) Prepare the general journal entries necessary to bring the cash at bank account into agreement with the adjusted balance on the bank reconciliation statement. QUESTION 2 Chico Ltd is a retailer company in Kiama central business district. At financial year end 30 June 2013, Chico Ltd had reported on its financial statement the balance of Accounts Receivable $850,000 (Debit) and the beginning balance of Provision for Doubtful Debts $5,350 (Debit). Net credit sales for the year amounted to $1,200,000 and the Provision for Doubtful Debts has not yet been adjusted for 2013. Required: (a) At the end of 2013, the following Accounts Receivable were deemed uncollectible: - KFC Coke $12,850 0 Red Rusty $3 5,100 c Total $17,950 Prepare the 2013 journal entry necessary to write off the above accounts. (b) Assume that Chico Ltd uses the percentage of sales method to estimate Doubtful Debts Expense. After analysing industry averages and prior year's activity, management has determined that the Provision for Doubtful Debts for 2013 should be 3% of net credit sales. Prepare the journal entry to adjust the Provision for Doubtful Debts. (c) Assume that Chico Ltd uses the ageing of accounts receivable method. The ageing schedule prepared by the company's credit manager indicated that after the write off the above accounts, 3 Provision for Doubtful Debts of $30,650 is appropriate. Prepare the journal entry to adjust the Provision for Doubtful Debts. 00000 vodafone AU 3G J:F9:31 CI} 0 95% -' moodIe.UOWplatform.edu.au QUESTION 3 Fresno Ltd uses the periodic inventory method and provides the following information in relation to its inventory transactions during August 2013: July 1 Beginning inventory 10 units @ $200 5 Purchased 20 units @ $250 10 Soid 20 units 12 Purchased 20 units @ $300 15 Purchased 10 units @ $350 25 Soid 20 units Required: 1. Calculate the cost of ending inventory at 31 August and the Cost of Goods Sold for August using the following costing methods: a. Weighted Average. b. First In First Out. 2. Using a perpetual system and FIFO costing method, prepare journal entries in general journal form to record July transactions above
