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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?

    © BrainMass Inc. brainmass.com June 4, 2020, 2:04 am ad1c9bdddf
    https://brainmass.com/business/auditing/upton-bank-reconcilation-for-scott-company-classifying-transactions-436793

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    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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