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# Upton Bank Reconcilation for Scott Company - Classifying Transactions

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Problem 1. The May 31, 2012, balance per bank statement for Upton Company was \$7,200. The cash balance per books was \$9,500. Outstanding checks amounted to \$800, and deposits in transit were \$2,400. The bank statement contained an NSF check for \$500, a service charge for \$25, and a debit memo for direct payment of the telephone bill of \$175.

Required:

1) Prepare a bank reconciliation to determine the true cash balance at May 31, 2012.

Problem 2. Scott Company is a merchandising business that was started in 2012. Scott uses the perpetual inventory system. It experienced the following events during 2012.

1. Acquired \$25,000 cash by issuing common stock
2. Purchased inventory on account that cost \$14,000, terms 2/10, n/30
3. Sold inventory that had cost \$8,400 for \$15,000 cash
4. Paid for the merchandise referred to in event 2, within the discount period

Required:

1) Record the events in the financial statements model below; include column totals.
2) Prepare an income statement for 2012.
3) What is the amount of total assets at the end of 2012?

#### Solution Preview

Solutions to your two problems are provided in a separate Excel file attached.

1. Bank Reconciliation reconciling ...

#### Solution Summary

The following posting helps with problems involving bank reconciliation, financial statements, income statements and total assets.

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