Part C
1. Calculate the due date and interest for the following notes:
a. $40,000, 90 day note, issued May 7, at 6%
b. $17,500, 180 day note issued October 3, at 5.5%
2. Hardy Co. uses the allowance method to record
uncollectible debts and estimates bad debt at 12% of year end Accounts
Receivable. The ending balances in Accounts Receivable and Allowance
for Doubtful Accounts are $90,000 dr and $1,200 cr respectively.
b. Assume the ending balances are $30,000 dr and
500 dr and the estimate is 5% of the ending Accounts Receivable
balance. What is the amount that would be used in the same entry?
Clark Company is a wholesaler of sailboats. The following transactions took place during the month of June 2015
June 1. Sold merchandise costing $6,700 to Andrew
Smith on account (2/15; n30). Cost of merchandise was $5,000. Shipping
charges $900, FOB shipping point, prepaid and added to invoice.
June 4. Accepted a $500 return from Smith.
June 11 Received payment from Smith.
June 6 Purchased $100,000 of merchandise from
Donald Inc. (1/10, n30). Shipping charges, $2,000, FOB shipping point,
prepaid and added to the invoice.
June 12 Returned $3,500 of merchandise to Donald.
June 15 Paid Donald.
Required:
1. Name the account that will be debited on June1.______________
2. What is the total amount that will be debited to that account on June 1?________________________
3. Name the account that will be used to record the June 1 shipping charges.______________________
4. Name the account that will be credited on June 4.___________
5. What is the amount of the payment Clark will receive from Smith on June 11?___________________
6. Name the account that will be credited on June 6. ____________
7. What is the amount that will be credited to that account?____________
8. Name the account that will be used to record the June 6 shipping charges. ________
9. What is the amount that will be paid on June 15.___________
10. Name the account that will record the discount on June 15.____________
Part E
1. Journalize the entries to record the following:
1-Sep Established a petty cash fund of $350
30-Sep The amount of cash in the petty cash fund
is now $130. The fund is replenished based on the following receipts:
office supplies, $116; postage $108.
Oct. 1 Decreased the petty cash fund to $250.
a. Following the completion of the bank
reconciliation, an adjusting entry was made that debited cash and
credited Interest Revenue. Therefore the bank reconciliation must have
included an item that was:
deducted from the balance per company's records
deducted from the balance per bank statement
added to the balance per bank statement
added to the balance per company's records
b. A check drawn by a company for $340 in payment
of a liability was recorded in the journal as $430. This item would be
included on the bank reconciliation as a(n)
addition to the balance per the company's records
addition to the balance per the bank statement
deduction from the balance per the bank statement
deduction from the balance per the company's records
c. A check drawn by a company in payment of a
voucher for $965 was recorded in the journal as $695. This item would
be included in the bank reconciliation as a(n)
deduction from the balance per the company's records
addition to the balance per the bank statement
deduction from the balance per the bank statement
addition to the balance per the company's records
d. Meredith Company gathered the following reconciling information in preparing its May bank reconciliation
Cash balance per books, 5/31 $4,500
Deposits in transit 375
Notes receivable and interest collected by bank 650
Bank charge for check printing 40
Outstanding checks 2,400
NSF check 140
