Question 1
Western Flyers received its bank statement for the month of July with an ending balance of $11,065.00. Western Flyers determined that check #598 for $125.00 and check #601 for $375.00 were both outstanding. Also, a $7,500.00 deposit for July 30th was in transit as of the end of the month. Big Bucks Bank also collected a $5,000.00 notes receivable on July 1st that was issued January 1st at 12% annual interest. No interest revenue has been accrued on this note and Big Bucks Bank charged a $15.00 fee for the collection service.The company's morning reports resulted in a bank service charge of $20.00 and a customer check for $75.00 was returned with the statement marked ?NSF?. The ending balance of the Western Flyers cash account is $12,875.00.
Complete a bank/account reconciliation and write any necessary journal entries for the reconciliation.
Question 2
For a business that makes advance provision for uncollectible receivables
(a)Journalize the entries to record the following:
(1)Record the adjusting entry at December 31, the end of the fiscal year, to provide for doubtful accounts. The accounts receivable account has a balance of $800,000, and the contra asset account before adjustment has a debit balance of $600. Analysis of the receivables indicates doubtful accounts of $20,000.
(2) In March of the following fiscal year, the $550 owed by Flake Co. on account is written off as uncollectible.
(3) Eight months later, $200 of the Flake Co. account is reinstated and payment of that amount is received.
(4) In October, $400 is received on the $600 owed by Doe Co. and the remainder is written off as uncollectible.
(b)Based on the data in (a) (1) above, what is the net realizable value of the accounts receivable as reported on the balance sheet as of December 31?
(c) Assuming that the business had been following the direct write-off procedure in accounting for uncollectible receivables, journalize the entries to record the following:
(1) Recorded the write-off of account of Flake Co. [(a) (2) above].
(2) Reinstated account of Flake Co. for $200 and recorded payment of that amount received [(a) (3) above].
(3) Recorded the receipt of $400 from Doe Co. in (a) (4) above and wrote off the remainder owed as uncollectible
Question 3
Computer equipment (office equipment) purchased 6 1/2 years ago for $170,000, with an estimated life of 8 years and a residual value of $10,000, is now sold for $60,000 cash. (Appropriate entries for depreciation had been made for the first six years of use.) Journalize the following entries:
(a) Record the depreciation for the one-half year prior to the sale, using the straight-line method.
(b) Record the sale of the equipment.
(c) Assuming that the equipment had been sold for $30,000 cash, prepare the entry for (b) above to record the sale.
Question 4
Equipment purchased at the beginning of the fiscal year for $150,000 is expected to have a useful life of 5 years, or 15,000 operating hours, and a residual value of $30,000. Compute the depreciation for the first and second years of use by each of the following methods:
(a) Straight-line
(b) Units-of-production (2,500 hours first year; 3,250 hours second year)
(c) Declining-balance at twice the straight-line rate
(Round the answer to the nearest dollar.)