The following accounts and totals, taken from Chef Cheryl's Bistro, display some of Chef Cheryl's Bistro's adjusted balances before closing:

Cheryl Kind, Capital	50,000
Cheryl Kind, Withdrawals	25,000
Current Assets	10,000
Long-Term Assets	45,000
Total Assets	?
Total Expenses	55,000
Total Liabilities	?
Total Revenue	60,000

Required:

Using the details provided, calculate the Total Assets and Total Liabilities in the table above.

 

 

Question 

 

The following transactions occurred in December 2018:

1. Collection of interest revenue earned on an investment
2. Cost of goods sold along with a credit sale
3. Sale on account
4. Cash sale
5. Return of merchandise
6. Purchase of office furniture on account
7. Payment on account
8. Payment of telephone bill
9. Getting a loan from the bank
10. Expiration of prepaid rent
11. Cash purchase of computer equipment
12. Amortization of office furniture
13. Accounts receivable collected
14. Purchases of goods for sale on account
15. Prepayment of rent

Required:

Use the following abbreviations to indicate the journal in which you would record the December 2018 transactions above:

G = General Journal

S = Sales Journal

CR = Cash Receipts Journal

P = Purchases Journal

CP = Cash Payments Journal

 

 

Question  

 

Candy Cane's cash receipts journal had the following May 2018 transactions:

Cash Receipts Journal                                                                      Page 5
		Debits		Credits
						Other Accounts
Date 2018		Cash	Sales Discounts	Accounts Receivable	Sales Revenue	Account Title	Post Ref.	Amount
May	16	784	16	800		Next Up Ltd.	A
	19	600		600		Container Corp.	B
	24	3,000				Interest Receivable	C	3,000
	27	500				Bank Loan	D	500
	30	700				Candy Cane, Capital	E	700
	31	1,000			1,000
		6,584	16	1,400	1,000	Totals		4,200
		F	G	H	I			J

                                                                                                                                            

Candy Cane's general ledger chart of account numbers included the following:

Account	Number
Cash	1000
Accounts Receivable	1100
Interest Receivable	1200
Bank Loan	2000
Candy Cane, Capital	3000
Sales Revenue	4000
Sales Discounts	4100

Required:

Indicate whether the ten posting references identified by letters (A, B, C, D, etc.) should be:

• (√) A check mark for a posting to a customer account in the accounts receivable subsidiary ledger
• (#) An account number for a posting to an account in the general ledger; if applicable, provide the account number
• (X) A capital letter "X" for an amount not posted

 

 

Question 

 

Trendy Beachwear & Accessories' purchases journal recorded five entries that were for valid transactions. However, the purchases journal had several errors. Actually, only one entry was correct, and the other four entries had errors.

						PURCHASES JOURNAL
					Credits	Debits
								OTHER ACCOUNTS
DATE		Supplier	Invoice Date	Post Ref.	Accounts Payable	Inventory	Supplies	Account Title	Post Ref.	Amount
May	5	Salty Apparel	05/04	√	5,400			Purchases Discounts	300	5,400
	7	Furniture Forever	05/05	√	5,700		5,700
	13	Quick Office Suppliers	05/13		1,650	1,650
	17	Swimco Swimwear	05/15	√	3,800	3,800
	25	Summersalt Sundresses	05/25			3,600	(3,600)
		Totals			16,550	9,050	2,100			5,400
					(200)	(120)	(130)

Required:

1. Which entry in the purchases journal was recorded correctly?
2. make corrected purchases journal. If required, create new/own chart of account number.

 

Question  

Shoes Supreme used the perpetual inventory system. All of its credit sales have the terms 2/10, n/30. Shoes Supreme incurred the following November 2018 transactions:

• Nov. 3: Issued invoice #220 for $8,000 sales on account to Wilson Ltd. Cost of this inventory was $4,500.
• Nov. 4: $20,000 Inventory was purchased on account from Dancing Shoes Ltd. The terms were 4/10, n/60.
• Nov. 5: Received $2,000 cash for selling inventory. Cost of this inventory was $1,200.
• Nov. 6: Purchased supplies for $3,300. It was paid by cheque #330.
• Nov. 8: Received $7,000 interest revenue.
• Nov. 10: Issued invoice #221 for $20,000 sales on account to Private Design Ltd. Cost of this inventory was $12,000.
• Nov. 11: Purchased $2,800 office furniture. It was paid by cheque #331.
• Nov. 12: Received $7,840 from Wilson Ltd. in full settlement of its accounts receivable.
• Nov. 13: Paid Dancing Shoes Ltd. with cheques #332.
• Nov. 15: Purchased $9,000 inventory on account from Laces Ltd. The terms were 2/10, n/60.
• Nov. 16: Issued invoice #222 for $9,000 sales on account to Children's Wear Ltd. Cost of this inventory was $6,500.
• Nov. 17: Issued credit memo to Children's Wear Ltd. for $9,000 for merchandise sent by mistake and was returned to Shoes Supreme. Also accounted for receipt of the inventory.
• Nov. 18: Issued invoice #223 for $4,000 sales on account to Wilson Ltd. Cost of this inventory was $2,800.
• Nov. 19: Received $19,600 from Private Design Ltd. in full settlement of its accounts receivable.
• Nov. 20: Purchased $10,000 inventory on account from Jones Ltd. The terms were net 30.
• Nov. 21: Purchased $22,000 brochures on account from Direct Printing Ltd. The terms were 2/10, n/60. Advertising Expense was debited.
• Nov. 22: Paid Radio Ltd. $30,000 with cheques #333 to place radio ads to air the last week in December. Prepaid Advertising was debited.
• Nov. 23: Sold supplies to an employee for $100 cash, which was the cost of the supplies.
• Nov. 25: Paid $300 telephone bill with cheques #334.
• Nov. 26: Purchased $15,000 inventory on account from Laces Ltd. The terms were 3/10, n/30.
• Nov. 27: Returned defective inventory to Laces Ltd. Issued a debit memo for $2,000.
• Nov. 28: Issued invoice #224 for $7,000 sales on account to Private Design Ltd. Cost of this inventory was $5,400.
• Nov. 28: Received $3,920 from Wilson Ltd. in full settlement of its accounts receivable.
• Nov. 30: Paid $2,000 salary with cheques #335.

Required:

1. Open Shoes Supreme's general ledger accounts using the following chart of account numbers provided:

Cash	100		Sales Discounts	410
Accounts Receivable	110		Sales Returns & Allowances	420
Supplies	120		Interest Revenue	430
Prepaid Advertising	130		Cost of Goods Sold	500
Inventory	140		Salary Expense	510
Office Furniture	150		Advertising Expense	520
Accounts Payable	200		Telephone Expense	530
Sales Revenue	400

1. Open these accounts in the accounts receivable subsidiary ledger accounts: Private Design Ltd., Children's Wear Ltd., and Wilson Ltd. Open these accounts in the accounts payable subsidiary ledger accounts: Dancing Shoes Ltd., Direct Printing Ltd., Laces Ltd., and Jones Ltd.
2. Record the above November transactions in a sales journal, a cash receipts journal , a purchases journal, a cash payments journal, and a general journal. Ignore PST and GST.
3. Post daily to the accounts receivable and accounts payable subsidiary ledgers. Post the individual amounts to the general ledger accounts on the date recorded in the journals. Post column journal totals to the general ledger accounts on November 30.
4. Total the columns in the journals. Illustrate that the total debits equal the total credits in each journal.
5. Balance/reconcile the accounts receivable subsidiary ledgers and the accounts receivable in the general ledger. Balance/reconcile the accounts payable subsidiary ledgers and the accounts payable in the general ledger.

Question 

The following items appeared on Sew Safe's bank reconciliation statement:

1. Bank error: The recording of a deposit for $377 should have been $773.
2. Bank debit memo for service charge
3. Outstanding cheques
4. Outstanding cheques from the previous month that are still outstanding
5. Bank collection of a note receivable on Sew Safe's behalf
6. Deposits in transit for the current month
7. Bank credit memo for interest earned on Sew Safe's bank balance
8. NSF cheques
9. Book error: Sew Safe credited cash for $5,000. The correct credit was $500.
10. Bank error: The bank decreased Sew Safe's bank account for a cheque written by another bank customer.

Required:

1. Use the following numerals to classify each item:
2. An addition to the book balance
3. A subtraction from the book balance
4. An addition to the bank balance
5. A subtraction from the bank balance
6. Indicate the items that will result in an adjustment to the company's records; indicate why the other items do not require an adjustment.

Question  

Internal control procedures were overlooked in several different situations.

Required:

Identify the internal control procedures that were overlooked in the following situations. If writing "other controls" is applicable, justify your position.

1. A charity golf tournament is held every year to raise funds. The charity raises over $15,000 a year. The organizer's 16-year-old son is hired to sell tickets, and he also handles the cash collected.
2. Ice Cream Gallery deposited cash in the bank several times throughout the day. Ice Cream Gallery's supervisor wanted to decrease the time that the employees spent going to the bank to deposit the cash. Consequently, the supervisor began a new schedule, whereby the cash was kept at Ice Cream Gallery, and all of the cash was deposited only once a week, on Monday.
3. During your audit of a business, you disclose that the same employee who ordered merchandise also approved the invoices for payment.
4. Fast Football Club's bookkeeper was elected for a fifth term to run all the financial matters of the club. Excellent internal controls were in place, since the president and secretary had signing authority.
5. The local corner store had the same trusted employee serve as cashier for over 15 years.
6. At one department store, the manager was determined to cut down paperwork. The receiving department employee would no longer prepare receiving report, which summarized the amounts of items received from the supplier.
7. Business was slow at the local theatre on Wednesday and Thursday nights. To slash costs, the proprietor decided not to use a ticket taker on those nights. The cashier who sold the tickets was told to hold onto the tickets, as those tickets represented the number of tickets sold.

 

 

Question  

Computer Wizard hired an accounting assistant, Joe John, who accidentally deleted some of Computer Wizard's November 30, 2018 data, including the cash balance and the bank reconciliation. Accountant Wendy World was able to obtain the following from Computer Wizard's accounting and banking records:

1. Wendy World determined that two cheques (#280 for $500.00 and #287 for $660.00) had not been cashed as of December 01. Wendy World was positive that there was only one deposit in transit on the November 30 bank reconciliation, but she was unable to remember the amount.
2. The cash receipts and cash payments journals contained the following entries for December 2018:

Cash Receipts		Cash Payments
Amounts		Cheque #	Amount
$ 900.00		300	$ 300.00
1,800.00		301	440.00
3,500.00		302	460.00
3,000.00		303	800.00
700.00		304	570.00
$ 9,900.00		305	3,500.00
		306	void
		307	490.00
		308	1,100.00
			$ 7,660.00

1. Computer Wizard's bank provided the following statement as of December 31, 2018:

 

 

1.  

	Date	Cheques and Other Debits		Deposits and Other Credits		Balance
Dec.	1	# 301	440.00		2,500.00	7,000.00
	2	# 287	660.00			6,340.00
	5	# 302	460.00			5,880.00
	8				900.00	6,780.00
	14	# 300	300.00		1,200.00	7,680.00
	17	EFT	600.00			7,080.00
	19			EFT	420.00	7,500.00
	22	# 304	570.00		1,800.00	8,730.00
	22	# 305	3,900.00	EFT	1,300.00	6,130.00
	24			EFT	850.00	6,980.00
	27	NSF	1,000.00		3,500.00	9,480.00
	28	SC	50.00			9,430.00
	31	# 308	1,100.00			8,330.00

1. The deposit made on December 14 was for the collection of a note receivable ($1,100.00) plus interest.
2. The electronic transfers (EFTs) had not yet been recorded by Computer Wizard because the bank statement was the first notification of them.

• The December 17 EFT was for the monthly payment on an insurance policy for Computer Wizard.
• The December 19 and December 22 EFTs were collections on accounts receivable.
• The December 24 EFT was in error; the transfer should have been to Computer World.

1. The NSF cheque on December 27 was received from a customer as payment for computer repairs.
2. Cheque #305 was correctly written for $3,900.00 for the purchase of computers (assume a periodic inventory system), but was incorrectly recorded by the accounting assistant.

 

 

Required:

1. Make Computer Wizard's bank reconciliation statement as of December 31, 2018, including the calculation of the book balance of December 31, 2018.
2. Prepare (all) necessary journal entries that would be required as a result of the December 31, 2018 bank reconciliation statement.

Question 

Oceanside Care Centre created a petty cash fund with an imprest balance of $200 on June 01. The fund custodian authorized the following petty cash tickets in June:

Ticket #	Item	Amount
501	Retirement Gift	$ 100
502	Cab fare for retiree	30
503	Office Supplies	17
504	Delivery of Parcel	12
505	Office Supplies	27

On June 30, prior to replenishment, the fund contained the above tickets plus $10.00. The accounts affected by the petty cash payments were Retirement Expense, Office Supplies, and Delivery Expense.

Required:

1. Explain the characteristics and internal control of an imprest fund.
2. On June 30, how much cash should the petty cash fund hold before it is refilled?
3. Record journal entries to the following. Be sure to include explanations.
   1. Create the fund
   2. Refill the fund
4. Record the July 01 journal entry to increase the petty cash fund balance to $400. Provide an explanation, and, in a few words, discuss what the custodian did in this case.