ACCT 201 FA15 Exam 2 Review(1) - Exam 2 Review Practice...

Exam 2 Review
Practice Exercises

Elmo Company has an agreement with a Big Bird Credit Card
Company that calls for cash to be received immediately upon deposit
of Elmo’s customers' credit card sales receipts. The credit card
company receives 2% of card sales as its fee. If Elmo has $6,500 in
credit card sales on April 8th, prepare the appropriate journal entry
to record the credit card sales.
Ch. 7 - Credit Card Sales
Date Debit Credit
Apr. 08 6,370
130
6,500
Credit Card Expense ($6,500 x 0.02)
Cash
Sales
General Journal

Peter Rabbit Company deposits all cash receipts on the day when they are received and it makes all cash payments by check.
Prepare a bank reconciliation for the company using the above information.
Bank statement balance $29,900 Book balance $36,163
Add: Add:
Deposit of May 31 9,560
9,560
Deduct: Deduct:
Outstanding checks 4,300 Bank service charge 250
NSF check 816
4,300 1,066
Adjusted bank balance $35,160 Adjusted book balance $35,160
d. Check No. 504, listed with the canceled checks, was correctly drawn for $518 in payment of a utility bill on
May 15. Peter Rabbit incorrectly recorded it with a debit to Utilities Expense and credit to Cash of $581.
e. A debit memorandum for $816 refers to a $816 NSF check from a customer; the company has not yet
Peter Rabbit Company
Bank Reconciliation