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Accounting 1A Exam 2 - Summer 2007

# Accounting 1A Exam 2 - Summer 2007 - Management 1A Summer...

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Unformatted text preview: Management 1A Summer 2007 Danny S. Litt EXAM 2 Solutions I agree to have my grade posted by Student ID Number ________________ _________________ (Signature) (Student ID Number) Name: ________________ PROBLEM POINTS SCORE 1 30 2 30 3 20 4 10 5 40 6 30 7 30 8 10 TOTAL 200 M ANAGEMENT 1A N AME : __________________________ Page 2 Problem 1 The following information is available for the Edwards Company for its March 31 bank reconciliation: From the March 31 bank statement: Previous Balance Total Checks and Debits Total Deposits and Credits Current Balance \$10,908 \$7,805 \$11,905 \$15,008 Checks and Debits Deposits and Credits Daily Balance Date No. Amount Date Amount Date Amount 03/03 2874 1,210 03/02 4,340 03/01 10,908 03/11 2906 3,850 03/27 7,270 03/02 15,248 03/15 2905 170 03/31 295 IN 03/03 14,038 03/25 2909 725 03/11 10,188 03/29 2908 1,350 03/15 10,018 03/30 500 NSF 03/25 9,293 03/27 16,563 03/29 15,213 03/30 14,713 03/31 15,008 NSF: A check from a customer, Cook Co. in payment of their account. IN: Interest earned on the account. From the Edwards Company's accounting records: Cash Receipts Deposited Cash Disbursements Date Cash Debit Check No. Cash Credit March 7 4,340 2905 170 27 7,270 2906 3,850 31 2,090 2907 460 13,700 2908 1,350 2909 725 2910 340 6,895 Cash Acct. No. 101 Date Explanation PR Debit Credit Balance February 28 Balance 9,698 March 31 Total receipts R4 13,700 23,398 31 Total disbursements D5 6,895 16,503 Required: (a) Based on the above information, prepare a bank reconciliation for the Edwards Company. (b) Prepare the necessary adjusting journal entries to adjust cash to the reconciled balance. M ANAGEMENT 1A N AME : __________________________ Page 3 (a) Edwards Company Bank Reconciliation March 31 Bank statement balance........... \$15,008 Book balance .............................. \$16,503 Add: Add: Deposit in transit.................... 2,090 Interest earned on account 295 17,098 16,798 Deduct: Deduct Outstanding checks NSF check ................................ 500 #2907 ................................ \$ 460 #2910 ................................ 340 800 Adjusted bank balance ............ \$16,298 Adjusted book balance................ \$16,298 (b) Date Accounts Debit Credit Mar. 31 Cash......................................................................... 295 Interest revenue .................................................. 295 Mar. 31 Accounts receivable – Cook Company ................... 500 Cash.................................................................... 500 M ANAGEMENT 1A N AME : __________________________ Page 4 Problem 2 A company purchased merchandise inventory costing \$15,000 with credit terms of 2/10, n/30 on November 7. On November 15, the company paid 1/3 of the amount due. The remaining balance was paid on December 7....
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Accounting 1A Exam 2 - Summer 2007 - Management 1A Summer...

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