Question
Question 1 Explain how and where accounts receivable are reported on the financial statements, and what the difference is between accounts receivable and notes receivable.
Question 1
Explain how and where accounts receivable are reported on the financial statements, and what the difference is between accounts receivable and notes receivable.
Question 2
John Snow's chequebook lists the following:
Date
Cheque #
Item
Cheque
Deposit
Balance
Nov
1
$505
4
622
Horizon Utility
$39
466
9
Dividends
$116
582
13
623
Canadian Tire
43
539
14
624
Petro-Canada
58
481
18
625
Cash
50
431
26
626
Faith of the Seven Church
25
406
28
627
Afforable Housing
275
131
30
Paycheque
746
877
The November bank statement shows:
Balance
$505
Add deposits
116
Deduct cheques
No.Amount
622$39
62343
62485
62550
Other charges:
NSF cheque
$8
Service charge
12
Balance
$384
Prepare John Snow's bank reconciliation at November 30th.
Question 3
Digital Solutions Inc is preparing its cash budget for 2016. Digital ended 2015 with cash of $81 million, and managers need to keep a cash balance of at least $75 million for operations.
Collections from customers are expected to total $11,284 million during 2016, and payments for the cost of services and products should reach $6,166 million. Operating expense payments are budgeted at $2,543.
During 2016, Digital expects to invest $1,825 million in new equipment and sell older assets for $115 million. Debt payments scheduled for 2016 will total $597 million. The company forecasts net income of $890 million for 2016 and plans to pay dividends of $338.
Prepare Digital Solutions cash budget for 2016. Will the budgeted level of cash receipts leave Digital with the desired ending cash balance of $75 million, or will the company need additional financing? If it does, how much will it need? Please prepare a cash budget.
Question 4
The October 31 bank statement of Spooky Halloween Costumes Ltd. (SHC) has just arrived from TD Bank. To prepare the SHC bank reconciliation, you gather the following data:
- SHC's Cash account shows a balance of $2,256.14 on October 31.
- The October 31 bank balance is $4,023.05.
- The bank statement shows that SHC earned $38.19 of interest on its bank balance during October. This amount was added to SHC's bank balance.
- SHC pays utilities of $250 and insurance of $100 by EFT.
- The following SHC cheques did not clear the bank by October 31: Cheque #
- Amount
- 237
- $46.10
- 288
- 141.00
- 291
- 578.05
- 293
- 11.87
- 294
- 609.51
- 295
- 8.88
- 296
- 101.63
- The bank statement includes a donation of $850, electronically deposited to the bank for SHC.
- The bank statement lists a $10.50 bank service charge.
- On October 31, the SHC treasurer deposited $16.15, which will appear on the November bank statement.
- The bank statement includes a $300 deposit that SHC did not make. The bank added $300 to SHC's account for another company's deposit.
- The bank statement includes two charges for returned cheques from donors. One is a $395 cheque received from a donor with the imprint "Unauthorized Signature." The other is a nonsufficient funds cheque in the amount of $146.67 received from a client.
Prepare the bank reconciliation for SHC.
Journalize the October 31 transactions needed to update SHC's Cash account. You do not need to include an explanation for each entry
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