Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

At 31 December 2019, Fred Company has the following account Des. Credit Cash Accounts Receivable Allowance for doubtful accounts Debit $10,836.50 $19,300.00 $300,00 Answer part

image text in transcribed
At 31 December 2019, Fred Company has the following account Des. Credit Cash Accounts Receivable Allowance for doubtful accounts Debit $10,836.50 $19,300.00 $300,00 Answer part (a) and (b) independently a) The 31 December 2019 bank statement showed a balance of $14,051.50. You are to prepare the bank reconciliation of Fred Company at 31 December 2019, using the following supplementary information: 1. Deposit in transit at 31 December 2019 was $2,596.00. IL Outstanding checks: no 320, S588.00; no. 323, 51,060,00; no.325, $225.00. III. Service charge by bank, $60.00. IV. A note receivable for $4,000.00 left by Fred Company with bank for collection and the related interest of $284.00 had been collected and credited to company's account. No interest expense or payable is recorded before. V. A check for $205.00 drawn by a customer, Spot Ltd, in settlement of an accounts receivable, but deducted from Fred's account by the bank and returned with the notation "NSF." VI. Fred's check No. 318 was correctly written for $890.00 for a payment on account, but erroneously recorded in Fred 's accounting records as $809.00. 1) Prepare the bank reconciliation of Fred Company at 31 December 2019.(8 marks) i) Prepare the adjusting entries required to correct the balance of cash in Fred's book. (5 marks) b) Fred Company uses the allowance method to estimate uncollectible accounts receivable. The company estimated the uncollectible accounts receivable using aging of the accounts receivable at year-end. The following is the partial aging analysis done: Total 0-30 Accounts receivable $19,300 $7,000 y uncollectible 1% Number of Days Outstanding 31-60 61-90 91-120 $4,600 $3,900 $2,300 3% 5% 8% Over 120 $1,500 10% i) Compute the estimated amounts of uncollectible accounts recivable at 31 December 2019. (3 marks) ii) Prepare the year-end adjusting journal entry to record the bad debts. (2 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamental Financial Accounting Concepts

Authors: Thomas P. Edmonds

11th Edition

1260786587, 9781260786583

More Books

Students also viewed these Accounting questions

Question

What other requirements do they have for admission?

Answered: 1 week ago

Question

2. How do I perform this role?

Answered: 1 week ago