Test 2 Practice

Test 2 Practice - 1. The following information pertains to...

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1. The following information pertains to Macon, Inc. as of August 31, 2010: Balance per bank statement $5,186 Unadjusted Cash balance per books 5,055 Outstanding checks 1,816 August interest earned per bank statement 15 NSF check 450 Deposits outstanding 750 Check #800 cleared the bank for $1,100, but was incorrectly recorded in the books as $800. This check was a payment on account. A $6,000 deposit was recorded properly in the books, but recorded in error by the bank as $5,800. (1) Prepare a bank reconciliation for August. (2) Prepare any journal entries that should be made as a result of the bank reconciliation. (3) What adjusted cash balance should the company report on the August 31 balance sheet? 2. Carter, Inc. reports the following amounts at the end of 2010 before adjusting entries: Credit sales for 2010 $230,000 Accounts Receivable 42,000 Allowance for Uncollectible Accounts (credit) 1,100 Sales Discounts 2,500 4,000 (1) Carter uses the percentage of receivables method and estimates 10% of receivables will not be collected: (a) Record bad debt expense for 2010. (b) Calculate the NRV of accounts receivable. (2) Based on an aging of its accounts receivable, Carter estimates that $1,800 of the receivables will not be collected. Assuming the balance in the allowance account is a debit balance: (a) Record bad debt expense for 2010. (b) What is the balance in the allowance account after recording bad debt expense? (3) Carter uses the percentage of credit sales method and estimates 3% of net credit sales will not be collected: (a) Record bad debt expense for 2010. (b) What is the balance in the allowance account after recording bad debt expense?
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This note was uploaded on 02/20/2012 for the course ACCT 225 taught by Professor Canace during the Fall '08 term at South Carolina.

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Test 2 Practice - 1. The following information pertains to...

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