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    Bank reconciliation / bad debts

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    Please see attached - 4 questions

    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.

    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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    Solution Summary

    The solution explains some questions relating to bank reconciliation and bad debts