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PROBLEM 7 . 8 A Short Comprehensive Problem The Cash account in the general ledger of Hendry Corporation shows a balance of $ 9 6
PROBLEM A Short Comprehensive Problem The Cash account in the general ledger of Hendry Corporation shows a balance of $ at December prior to performing a bank reconciliation The company's bank statement shows a balance of $ at the same date. An examination of the bank statement reveals the following: Deposits in transit amount to $ Bank service charges total $ Outstanding checks total $ A $ check marked NSF from Kent Company one of Hendry Corporation's customers was returned to Hendry Corporation by the bank. This was the only NSF check that Hendry Corporation received during A canceled check no written by Hendry Corporation in the amount of $ for office equipment was incorrectly recorded in the general ledger as a debit to Office Equipment of $ and a credit to Cash of $ In addition to the above information, Hendry Corporation owns the following assets at December : money market accounts totaling $ $ of highgrade, day, commercial paper, and highly liquid stock investments valued at $ at December these investments originally cost Hendry Corporation $ On December Hendry Corporation sold an unused warehouse to Moran Industries for $ Hendry accepted a sixmonth, $ percent note receivable from Moran. The note, plus accrued interest, is due in full on May Hendry Corporation adjusts for accrued interest revenue monthly. Hendry Corporation uses the income statement approach to compute its uncollectible accounts expense. The general ledger had reported Accounts Receivable of $ at January At that time, the Allowance for Doubtful Accounts had a credit balance of $ Throughout the company wrote off actual accounts receivable of $ and collected $ on account from credit customers this amount includes the $ NSF check received from Kent Company Credit sales for the year ended December totaled $ Of these credit sales, percent were estimated to eventually become uncollectible. Instructions a Prepare Hendry Corporation's bank reconciliation dated December and provide the journal entry necessary to update the company's general ledger balances. b Compute cash and cash equivalents to be reported in Hendry Corporation's balance sheet dated December c Prepare the adjusting entry necessary to account for the note receivable from Moran Industries at December d Determine the net realizable value of Hendry Corporation's accounts receivable at December e Determine the total dollar amount of financial assets to be reported in Hendry Corporation's balance sheet dated December f Assume that it is normal for firms similar to Hendry Corporation to take an average of days to collect an outstanding receivable. Is Hendry Corporation's collection performance above or below this average?
PROBLEM A
Short Comprehensive Problem
The Cash account in the general ledger of Hendry Corporation shows a balance of $ at December prior to performing a bank reconciliation The company's bank statement shows a balance of $ at the same date. An examination of the bank statement reveals the following:
Deposits in transit amount to $
Bank service charges total $
Outstanding checks total $
A $ check marked NSF from Kent Company one of Hendry Corporation's customers was returned to Hendry Corporation by the bank. This was the only NSF check that Hendry Corporation received during
A canceled check no written by Hendry Corporation in the amount of $ for office equipment was incorrectly recorded in the general ledger as a debit to Office Equipment of $ and a credit to Cash of $
In addition to the above information, Hendry Corporation owns the following assets at December : money market accounts totaling $ $ of highgrade, day, commercial paper, and highly liquid stock investments valued at $ at December these investments originally cost Hendry Corporation $
On December Hendry Corporation sold an unused warehouse to Moran Industries for $ Hendry accepted a sixmonth, $ percent note receivable from Moran. The note, plus accrued interest, is due in full on May Hendry Corporation adjusts for accrued interest revenue monthly.
Hendry Corporation uses the income statement approach to compute its uncollectible accounts expense. The general ledger had reported Accounts Receivable of $ at January At that time, the Allowance for Doubtful Accounts had a credit balance of $ Throughout the company wrote off actual accounts receivable of $ and collected $ on account from credit customers this amount includes the $ NSF check received from Kent Company Credit sales for the year ended December totaled $ Of these credit sales, percent were estimated to eventually become uncollectible.
Instructions
a Prepare Hendry Corporation's bank reconciliation dated December and provide the journal entry necessary to update the company's general ledger balances.
b Compute cash and cash equivalents to be reported in Hendry Corporation's balance sheet dated December
c Prepare the adjusting entry necessary to account for the note receivable from Moran Industries at December
d Determine the net realizable value of Hendry Corporation's accounts receivable at December
e Determine the total dollar amount of financial assets to be reported in Hendry Corporation's balance sheet dated December
f Assume that it is normal for firms similar to Hendry Corporation to take an average of days to collect an outstanding receivable. Is Hendry Corporation's collection performance above or below this average?
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