1. Legally restricted cash of $3,000 is not reported with "cash" and $1,000 overdraft must be presented as a current liability unless with the same bank -- which in this case it isn't the same bank. So answer is $10,000. 2. The credit would be to cash to use it to replenish the petty cash fund and the debit(s) would go to expense for amounts expended. 3. $38,940 - The NSF item and the bank service charge are already properly handled (included or excluded) in the bank balance. The bank does not have (or is not aware of) the deposits in transit (so they must be added) nor of the outstanding checks (which must be subtracted from the bank balance). $39,140 plus $5,000 - $5,200 = $38,940. 4. This is the "balance sheet" approach whereby the ending ADA balance is calculated and the ending ADA balance is adjusted to that amount with a debit to bad debt expense.
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This note was uploaded on 05/12/2010 for the course ACCT ACCT 3367 taught by Professor Kilic during the Spring '10 term at University of Houston.