Reference no: EM132951570
Questions -
Q1. The following transactions were made by Landers Corp. in March 2019. Mar. 1 Established a petty cash fund of $200 12 Reimbursed the fund for the following: Postage $10 Office supplies 50 Maintenance 35 Meals (selling expenses) 25 $120 18 Increased the fund by an additional $200 25 Reimbursed the fund for the following: Office supplies $75 Delivery charges 30 $105 28 Reduced the amount of the fund to $350. Required: Prepare journal entries to record these transactions.
Q2. The following information pertains to Ferguson Corp. at December 31, 2019, its year-end: Cash per company records Cash per bank statement Bank service charges not yet recorded in company records Note collected by bank not yet recorded in company records, including $25 of interest Fluet Inc. check deducted in error by bank December deposit recorded by the bank January 3, 2020 December checks not yet paid by bank in December $5,005 7,000 30 1,325 200 700 #631 $354 #642 746 #660 200 #661 300 $1,600 Required: Prepare a bank reconciliation and all necessary adjusting journal entries at December 31, 2019. CHAPTER SEVEN / Cash and Receivables First US Edition 303
Q3. The Cash general ledger account balance of Gladstone Ltd. was $2,531 at March 31, 2019. On this same date, the bank statement had a balance of $1,500. The following discrepancies were noted: a. A deposit of $1,000 made on March 30, 2019 was not yet recorded by the bank on the March statement. b. A customer's check amounting to $700 and deposited on March 15 was returned NSF with the bank statement. c. Check #4302 for office supplies expense, correctly made out for $125 and clearing the bank for this amount, was recorded in the company records as $152. d. $20 for March service charges were recorded on the bank statement but not in the company records. e. A cancelled check for $250 belonging to Global Corp. but charged by the bank to Gladstone Ltd. was included with the cancelled checks returned by the bank. f. There were $622 of outstanding checks at March 31. g. The bank collected a note receivable for $300 on March 31 including interest of $50. The bank charged Gladstone Ltd. a $10 service charge that also is not included in the company records. Required: Prepare a bank reconciliation and record all necessary adjusting entries at March 31, 2019.
Q4. Koss Co. Ltd. began operations on January 1, 2018. It had the following transactions during 2018, 2020, and 2021. 2018 Dec. 31 Estimated uncollectible accounts as $5,000 (calculated as 2% of sales) 2020 Apr. 15 Wrote off the balance of N. Lang, $700 Aug. 8 Wrote off $3,000 of miscellaneous customer accounts as uncollectible Dec. 31 Estimated uncollectible accounts as $4,000 (1½% of sales) 2021 Mar. 6 Recovered $200 from N. Lang, whose account was written off in 2020; no further recoveries are expected Sept. 4 Wrote off as uncollectible $4,000 of miscellaneous customer accounts Dec. 31 Estimated uncollectible accounts as $4,500 (1½% of sales). 304 CHAPTER SEVEN / Cash and Receivables First US Edition Required: 1. Prepare journal entries to record the above transactions. 2. Assume that management is considering a switch to the balance sheet method of calculating the allowance for doubtful accounts. Under this method, the allowance at the end of 2021 is estimated to be $2,000. Comment on the discrepancy between the two methods of estimating allowance for doubtful accounts.
Q5. Impulse Inc. had the following unadjusted account balances at December 31, 2019, its year-end. Account Balances Debit Credit Accounts Receivable Allowance for Doubtful Accounts Sales $125,000 $ 3,000 750,000 Impulse estimates its uncollectible accounts as five per cent of its December 31 accounts receivable balance. Required: 1. Calculate the amount of estimated uncollectible accounts that will appear on Impulse's balance sheet at December 31, 2019. 2. Calculate the amount of bad debt expense that will appear on Impulse's income statement at December 31, 2019. 3. Prepare a partial balance sheet at December 31, 2019 showing accounts receivable, allowance for doubtful accounts, and the net accounts receivable?