Homework

Homework Questions:

1. Shawnee Co. set up a petty cash fund for payments of small amounts. The following transactions involving petty cash fund occurred in May (the last month of the company’s fiscal year).

May 1 – Prepared a company check for $250 to establish the petty cash fund.

15 – Prepared a company check to replenish the fund for the following expenditures made since May.

a. Paid $78 for janitorial services.

b. Paid $63.68 for miscellaneous expenses.

c. Paid postage expenses for $43.50.

d. Paid $57.15 to The County Gazette (local newspaper) for an advertisement.

e. Counted $11.15 remaining in the petty cash box.

16 – Prepared a company check for $200 to increase the fund to $450.

31 – The petty cashier reports that $293.39 cash remains in the fund. A company check is drawn to

replenish the fund for the following expenditures made since May 15.

f. Paid postage expenses of $48.36.

g. Reimbursed the office manager for business mileage, $38.50.

h. Paid $39.75 to deliver merchandise to a customer, terms FOB destination.

31 – The company decides that the May 16 increase in the fund was too large. It reduces the fund by

$50, leaving a total of $400.

Required:

Prepare journal entries to establish the fund on May1, to replenish it on May 15 and on May 31, and to reflect any increase or decrease in the fund balance on May 16 and May 31.

Question #2

At December 31, 2011, Ethan Co reports the following results for its calendar-year.

Cash sales ………………. $1,803,750

Credit sales …………….. 3,534,000

In addition, its unadjusted trial balance includes the following items.

Accounts receivable ……………….……. $1,070,100 debit

Allowance for doubtful accounts ………… 15,750 debit

Required:

1. Prepare the adjusting entry for this company to recognize bad debts under each of the following independent assumptions.

a. Bad debts are estimated to be 2% of credit sales.

b. Bad debts are estimated to be 1% of total sales.

c. An aging analysis estimates that 5% of year-end accounts receivable are uncollectible.

2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on it December 31, 2011, balance sheet given the facts in part 1a.

3. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2011, balance sheet given the facts in part 1c.

P

0

8-05A

, 2011

0

Add:

Deduct:

Total

0

ELS COMPANY

0

30 Cash

0

30

Cash 0
30

Cash 0

Student Name:

Class:

Problem 08-05A

ELS COMPANY

Bank Reconciliation

September

30

Bank statement balance

Add:

Deposit of September 30

Total

Deduct:

Checks

No. 5893

5906

5908

Adjusted bank balance

Book balance of cash

Interest earned

Proceeds of note less coll. fee

NSF check

Error on check no.

5904

Adjusted book balance

General Journal

Date

Account Title

Debit

Credit

Sep 30

Cash

Interest Earned

To record interest earned.

Collection Expense

Notes Receivable

To record note collection less fee.

Accts. Rec.-S. Nilson

To charge account for NSF check plus fee.

Computer Equipment

To correct an entry error.

The bank statement reveals that some of the prenumbered checks in the sequence are missing.

Describe three situations that could explain this.

Enter a short answer in the space provided.

Given P08-05A

ELS COMPANY

No. 5893

Checks and Debits

Date Amount

5888

1,038.05

16,800.45

09/03

09/04

NSF

09/07

09/17

3.85

09/20

09/22

Deposits and Credits 09/28

Amount 09/29

18,363.25

Date

1,103.75 5901 1,824.25

12 2,226.90 5902 731.90
21 4,093.00 5903 399.10
25 2,351.70 5904

30

5905 937.00

5906

5907

5908

5909 1,807.65
Cash

Debit Credit Balance

11,358.10

9,099.05

$ 1,400.00

Given Data P08-05A:
August 31 bank reconciliation:
Outstanding checks:
No. 5888	$	1,038.05
$ 484.	25
From the September 30 bank statement:
September 30 Bank Statement:
Previous balance	$	16,800.45
Total	Checks and Debits	$ 9,620.05
Total	Deposits and Credits	$ 11,182.85
Current	Balance	$	18,363.25
Daily Balance
Date Check			Amount
	09/03	08/31
	09/04	5902		731.90	15,762.40
	09/07	5901		1,824.25	15,030.50
	09/17	588.25	09/05	16,134.25
	09/20	5905		937.00	14,310.00
	09/22	5903		399.10	09/	12	16,536.90
09/22 5904	2,080.00	15,948.65
	09/28	5907		21	15,011.65
	09/29	5909		1,807.65	09/21	19,104.65
16,625.55
09/25	18,977.25
18,763.40
Date Description	16,955.75
09/05 Deposit		1,103.75	09/30
09/12 Deposit		2,226.90
09/21 Deposit		4,093.00
09/25 Deposit		2,351.70
09/30 Interest	22.50
09/30 Credit memo	1,385.00
From Els Company’s Accounting Records:
Cash Receipts Deposited:	Cash Disbursements:
Cash Debit	Check No.	Cash Credit
Sept. 5
2,050.00
1,582.75
	11,358.10	859.30
213.85
276.00
	9,099.05
Acct. No. 101
Date Explanation	PR
Aug. 31 Balance	15,278.15
Sept. 30 Total receipts	R12	26,636.25
30 Total disbursements	D23	17,537.20
Check No. 5904 for computer equipment:
Entered in accounting records	$ 2,050.00
Correct amount of check	$ 2,080.00
Collection of Note:
Credit memorandum from bank		$ 1,400.00
Bank collection fee	$ 15.00
Check figures:
(1) Reconciled balance	$ 18,326.45
(2) Credit Note Receivable