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Bank reconciliation / bad debts

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Please see attached - 4 questions

E8-27
Angela Lansbury Company deposits all receipts and makes all payments by check. The following information is available from the cash records.

June 30 Bank Reconciliation
Balance per bank 7,000
Add: Deposits in transit 1,540
Deduct: Outstanding checks (2,000)
Balance per books 6,540

Month of July Results Per Bank

Balance July 31 8,650
July deposits 5,000
July checks 4,000
July note collected (not included in July deposits) 1,000
July bank service charge 15
July NSF check from a customer, returned by bank (recorded by bank as a charge) 335

(a) Prepare a bank reconciliation going from balance per bank and balance per books to correct cash balance.
(b) Prepare the journal entry or entries to correct the cash account.

P8-2
Bad-Debt Reporting

3. Uhura Co. provides for doubtful accounts based on 3% of credit sales. The following data are available for 2008.
Credit sales during 2008 2,100,000
Allowance for doubtful accounts 1/1/08 17,000
Collection of accounts written off in prior years
(customer credit was restablished) 8,000
Customer accounts written off as uncollectible during 2008 30,000

What is the balance in the Allowance for Doubtful Accounts at December 31, 2008?

4. At the end of its first year of operations, December 31, 2008. Chekov Inc. reported the following information.
Accounts receivable, net of allowance for doubtful accounts 950,000
Customer accounts written off as uncollectible during 2008 24,000
Bad debt expense for 2008 84,000

What should be the balance in accounts receivable at 12/31/08, before subtracting the allowance for doubtful accounts?

5. The following accounts were taken from Chappel Inc's trial balance at 12/31/08.
Debit Credit
Net credit sales 750,000
Allowance for doubtful accounts 14,000
Accounts receivable 410,000

If doubtful accounts are 3% of accounts receivable, determine the bad debt expense to be reported for 2008.

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Internal Controls and Cash Reconciliations

C 7 - Internal Control & Cash 1. Which one of the following is NOT a main purpose of internal control? a. Safeguard a company's assets from employee theft and unauthorized use. b. Enhance the accuracy and reliability of a company's accounting records. c. Prevent insider trading
2. Which one of the following is NOT a reason for the lack of agreement between the balances per bank statement and cash balance per books? a. Time lags b. Errors by either the bank or the company c. Segregation of duties
3. Bank reconciliation should be prepared a. Whenever the bank refuses to lend the company money b. When an employee is suspected of fraud c. To explain any difference between the depositor's balance per books with the balance per bank d. By the person who is authorized to sign checks
4. Deposits in transit a. Have been recorded on the company's books but not yet by the bank b. Have been recorded by the bank but not yet by the company c. Have not been recorded by the bank or the company d. Are customers' checks that have not yet been received by the company
5. In preparing bank reconciliation, outstanding checks are a. Added to the balance per bank b. De ducted from the balance per books c. Added to the balance per books d. Deducted from the balance per bank
6. If a check correctly written and paid by the bank for $438 is incorrectly recorded on the company's books for $483, the appropriate treatment on the bank reconciliation would be a. Add $45 to the bank's balance b. Add $45 to the book's balance c. Deduct $45 from the bank's balance d. Deduct $438 from the book's balance C 8 - Reporting & Analyzing Receivables
7. Net realizable value of accounts receivable is a. Accounts Receivable plus Allowance for Doubtful Account. b. Accounts Receivable minus Allowance for Doubtful Account. c. The same as Accounts Receivable because all accounts receivable are assumed to be collectible.
8. When an account becomes uncollectible and must be written off a. Allowance for Doubtful Accounts should be credited b. Accounts Receivable should be credited c. Bad Debt Expense should be credited d. Sales should be debited
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