The truth at wwwdeloittecacareers deloitte touche llp

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Unformatted text preview: tomer #3 Description May 1 May 9 Debit Balance forward Purchase – Journal page X Credit Balance - - - 28,650 - 28,650 ACCOUNTS RECEIVABLE Date Customer #4 Description Debit Credit Balance May 1 Balance forward 22,671 - 22,671 May 7 Purchase – Journal page X 6,300 - 28,971 May 11 Payment – Journal page X - 22,671 6,300 May 22 Purchase – Journal page X 28,332 - 34,632 ACCOUNTS RECEIVABLE Date May 1 May 18 Customer #5 Description Debit Balance forward Credit Balance 8,970 8,970 - Payment – Journal page X 8,970 - Download free eBooks at bookboon.com 24 Accounting Cycle Exercises II Problem 5: Solution b) ACCOUNTS RECEIVABLE Date 01-Jan-05 Customer #2 Description Debit Balance forward Credit Balance - - 51,675 May 5 Purchase – Journal page X 21,711 - 73,386 May 7 Purchase – Journal page X 6,300 - 79,686 May 9 Purchase – Journal page X 28,650 - 108,336 May 11 Payment – Journal page X - 22,671 92,490 May 15 Purchase – Journal page X 6,825 - 115,161 May 17 Payment – Journal page X - 4,209 88,281 May 18 Payment – Journal page X - 8,970 79,311 May 22 Purchase – Journal page X 28,332 - 107,643 May 26 Payment – Journal page X - 12,825 94,818 The Accounts Receivable general ledger account balance of $94,818 is in agreement with the sum of the individual subsidiary accounts ($21,711 + $9,825 + $28,650 + $34,632 =$94,818). This is an important reconciliation that should occur on a regular basis. Modern computer systems, including data base driven processes, have greatly reduced the frustration of maintaining subsidiary accounts that synchronize with control accounts. c) Subsidiary ledgers provide detailed information about the transactions with specific customers, vendors, and so forth. They enable one to know exactly what comprises a general ledger account balance. This information is very useful for many purposes, including preparing monthly billing statements for specific customers. Subsidiary ledgers might also be maintained for accounts payable, cash (if multiple bank accounts are in use), property assets (to track individual items of equipment in use by the business), capital stock (to track ownership of individual shareholders), and the like. d) Customer #2 is delinquent. This customer owed $15,825 at the beginning of May, but only paid $12,825 during the month. A portion of the beginning balance has been outstanding for more than the agreed 30-day period. Customer #4’s balance exceeds the $30,000 credit limit. Download free eBooks at bookboon.com 25 Accounting Cycle Exercises II Problem 6 Problem 6 June 2 Sudipta Gumm invested $50,000 cash in the capital stock of the newly formed corporation. June 3 H ired an administrative assistant, to be paid $6,000 per month. Leased office space at the rate of $2,000 per month. Signed a contract with Bangalore to deliver consulting services valued at $15,000. June 8 Purchased (and immediately used) office supplies on account for $1,500. June 9 Received $5,000 from Bangalore for work performed to...
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