Question

B. On December 1, 2014, Fullerton Company had the following account balances.

Debit Credit

Cash 18,200

Notes Receivable 2,200

Accounts Receivable 7, 500

Inventory 16, 000

Prepaid Insurance 1, 600

Equipment 28, 000

Accumulated Depreciation -Equip 3, 000

Accounts Payables 6, 100

Owners Capital 64, 400

During December, the company completed the following transactions.

December.

7

Received K3,600 cash from customers in payment of account (no discount allowed).

12

Purchased merchandise on account from Vance Co. K12,000, terms 1/10, n/30.

MW SBS 2020 BAF 111 BAC 211 Assignment20-21 Page 6

17

Sold merchandise on account K16,000, terms 2/10, n/30. The cost of the merchandise sold was K10,000.

19

Paid salaries K2,200.

22

Paid Vance Co. in full, less discount.

26

Received collections in full, less discounts, from customers billed on December 17.

31

Received K2,700 cash from customers in payment of account (no discount allowed).

Adjustment data:

1. Depreciation K200 per month.

2. Insurance expired K400.

Requirements

(i) Journalize the December transactions.

(ii) Enter the December 1 balances in the ledger T-accounts and post the December transactions.

(iii) The statement from Jackson County Bank on December 31 showed a balance of K26, 130. A comparison of the bank statement with the Cash account revealed the following facts.

1. The bank collected a note receivable of K2, 200 for Fullerton Company on December 15.

2. The December 31 receipts were deposited in a night deposit vault on December 31. These deposits were recorded by the bank in January.

3. Checks outstanding on December 31 totaled K1,210.

4. On December 31, the bank statement showed an NSF charge of K680 for a check received by the company from L. Bryan, a customer, on account.

MW SBS 2020 BAF 111 BAC 211 Assignment20-21 Page 7

Prepare a bank reconciliation as of December 31 based on the available information. (Hint: The cash balance per books is K26, 100.)

(iv) Post the adjusting entries to the ledger T-accounts.

(v) Prepare an adjusted trial balance.

Answer 1

Particulars	Dr Amt	Cr Amt
Cash Dr	2,200.00
To Note Receivable		2,200.00
Accounts Receivable Dr	490.00
To Cash		490.00
(Amount of NSF charge is not given)
Depreciation Expense Dr	200.00
To Accumulated Depreciation		200.00
Insurance Expense dr	400.00
To Prepaid Insurance		400.00