Question

orange corporation uses the following items for its bank reconciliation for the month of April balance per books april 30 $905

1. Orange Corporation uses the following items for its bank reconciliation for the month of April. Balance per books April 30 $ 905 Balance per bank statement April 30 $11,300 (1) Checks written in April but still outstanding $6,300. (2) Checks written in March but still outstanding $2,800. (3) Deposits of April 30 not yet recorded by bank $4,900. (4) NSF check of customer returned by bank $500. (5) Check No. 210 for $594 was correctly issued and paid by bank but incorrectly entered in the cash payments journal as payment on account for $549. (6) Bank service charge for April was $40. (7) A payment on account was incorrectly entered in the cash payments journal and posted to the accounts payable subsidiary ledger for $824 when Check No. 318 was correctly prepared for $284. The check cleared the bank in April. (8) The bank collected a note receivable fost the company of $6,000 plus $240 interest revenue. Prepare the bank reconciliation at April 30.

Answer 1

Solution Question #1: Bank reconciliation at April 30 Orange Corporation Bank Reconciliation April 30 Bank Statement Balance at April 30 Add: Deposit in transit (Deposit of April 30) $11,300 $4,900 $16,200 Deduct: Outstanding checks ($6,300 + $ 2,800) $9,100 Adjusted Bank Balance at April 30 $7,100 $905 Book Balance at April 30 Add: Error in posting (Check No. 318) Proceeds of Note plus interest $540 $6,240 $6,780 $7,685 $500 Deduct: NSF Check Error in posting (Check No. 210) Bank Service charges $45 $40 $585 Adjusted Book Balance at April 30 $7,100

Question # 2 Computation of Total Estimated Uncollectible Accounts at December 31, 2017 Age classification Estimated Percentage Uncollectible 1% Account Receivables Balance $170,000 $15,000 $12,000 $5,000 $9,000 $211,000 3% Current Accounts 1-30 days past due 31-60 days past due 61-90 days past due Over 90 days past due Totals Estimated Uncollectible Accounts $1,700 $450 $720 $750 $2,700 $6,320 6% | 30% Required (a): Computation of Bad debts expense for the Year ended Dec 31, 2017 Total Estimated Uncollectible Accounts at Year end Unadjusted balance under Allowance for Doubtful Accounts (Cr. Bal.) Bad debts expense for the year ended Dec. 31, 2017 ($6,320 - $300) $6,320 $300 $6,020 Adjusting Journal entry Date Dec. 31, 2017 Debit $6,020 Credit General Journal Bad Debts Expense Allowance for Doubtful Accounts (To record bad debts expense) $6,020 Required (b): Computation of Bad debts expense for the Year ended Dec.31, 2017 Total Estimated Uncollectible Accounts at Year end Unadjusted balance under Allowance for Doubtful Accounts (Dr. Bal.) Bad debts expense for the year ended Dec. 31, 2017 ($6,320 + $300) $6,320 $300 $6,620 Adjusting Journal entry Credit Date Dec. 31, 2017 Debit $6,620 General Journal Bad Debts Expense Allowance for Doubtful Accounts (To record bad debts expense) $6,620