ACCT1501 2011 Final Exam Practice Answers - ACCT1501...

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ACCT1501 Practice Exam Questions & Solutions 2012S11QUESTION 1 – Bank Reconciliation ASB Ltd. received its bank statement for the month ending 30 June, and reconciled the statement balance to the 30 June balance in the Cash account. The reconciled balance was determined to be $4800. The reconciliation recognised the following items: 1.Deposits in transit were $2100. 2.Outstanding cheques totalled $3000. 3.Bank service charges shown as a deduction on the bank statement were $50. 4.An NSF cheque from a customer for $400 was included with the bank statement. The firm had not been previously notified that the cheque had been returned non-sufficient funds (NSF). 5.In dealing with the review of cheques that have been paid out, there was a cheque actually written for $890, which has been mistakenly recorded as a disbursement of $980. Part A: What was the balance in ASB Ltd’s cash account before recognising any of the above reconciling items? (Show all the necessary steps.)
Part B: What was the balance shown on the bank statement before recognising any of the above reconciling items? (Show all the necessary steps.)
Again, solve the bank statement balance as the missing item given the reconciled balance and reconciling items. Balance per bank before reconciliation = $4 800 – 2 100 + 3000 =
Part C: Prepare any necessary adjusting journal entries.
ACCT1501 Practice Exam Questions & Solutions 2012S12QUESTION 2 ACCOUNTS RECEIVABLES xOn 1st July, 2007, one of SSS’s customers, BBB, went bankrupt. BBB owes SSS $2,500 and there is no hope for recovering this amount. xOn 1stOctober 2007, SSS collected $85,000 from outstanding accounts. SSS Company’s financial year ends on 31stDecember. xDuring the year to 31 December 2007, SSS sold goods for cash for $22,000, and on credit for $80,000. xOn 1stJanuary 2007, SSS Ltd. has a debit balance of $30,000 in Accounts Receivable and a credit balance of $ 4,500 in the Allowance for Doubtful Debts. Required:Part A (i)If bad debts expense for 2007 is recognised based on 2% of credit sales, prepare the entry to record bad debts expense.

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