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In: Accounting
Oscar’s Red Carpet Store maintains a checking account with Academy Bank. Oscar’s sells carpet each day...
Oscar’s Red Carpet Store maintains a checking account with Academy Bank. Oscar’s sells carpet each day but makes bank deposits only once per week. The following provides information from the company’s cash ledger for the month ending February 28, 2021. Date Amount No. Date Amount Deposits: 2/4 $ 2,400 Checks: 321 2/2 $ 4,400 2/11 2,000 322 2/8 450 2/18 2,900 323 2/12 2,200 2/25 3,800 324 2/19 1,900 Cash receipts: 2/26-2/28 1,300 325 2/27 250 $ 12,400 326 2/28 750 327 2/28 1,600 Balance on February 1 $ 6,500 $ 11,550 Receipts 12,400 Disbursements (11,550 ) Balance on February 28 $ 7,350 Information from February's bank statement and company records reveals the following additional information: The ending cash balance recorded in the bank statement is $11,645. Cash receipts of $1,300 from 2/26–2/28 are outstanding. Checks 325 and 327 are outstanding. The deposit on 2/11 includes a customer's check for $250 that did not clear the bank (NSF check). Check 323 was written for $2,800 for advertising in February. The
bank properly recorded the check for this amount. An automatic withdrawal for Oscar's February rent was made on February 4 for $1,100. Oscar's checking account earns interest based on the average daily balance. The amount of interest earned for February is $170. In January, one of Oscar's suppliers, Titanic Fabrics, borrowed $5,400 from Oscar. On February 24, Titanic paid $5,650 ($5,400 borrowed amount plus $250 interest) directly to Academy Bank in payment for January's borrowing. Academy Bank charged service fees of $125 to Oscar’s for the month. 2. Record the necessary cash adjustments.
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| Oscar's Red Carpet | ||||
| Bank reconciliation statement | Amount $ | Amount $ | ||
| Balance as per books | 7,350.00 | Balance as per bank | 11,645.00 | |
| Add: | Add: | |||
| g. Interest earned not recorded | 170.00 | b. Cheque receipt outstanding | 1,300.00 | |
| h. Collection from Titanic Fabrics not recorded | 5,400.00 | |||
| h. Interest on loan from Titanic Fabrics | 250.00 | |||
| Less: | Less: | |||
| d. Not Sufficient Fund Cheque | 250.00 | c. Cheque outstanding | 2,050.00 | |
| e. Cheque 323 recorded erroneously (2800-2000) | 800.00 | Cheque 325 | ||
| f. Automatic withdrawal of rent | 1,100.00 | Cheque 327 | ||
| i. Service charges not recorded | 125.00 | |||
| Adjusted book balance | 10,895.00 | Adjusted bank balance | 10,895.00 |
| Adjusting Entries | |||
| Event | Account | Debit $ | Credit $ |
| g. | Cash | 170.00 | |
| Interest revenue | 170.00 | ||
| h. | Cash | 5,400.00 | |
| Titanic Fabrics | 5,400.00 | ||
| h. | Cash | 250.00 | |
| Interest revenue | 250.00 | ||
| d. | Accounts receivable | 250.00 | |
| Cash | 250.00 | ||
| e. | Advertising Expense | 800.00 | |
| Cash | 800.00 | ||
| f. | Rent Expense | 1,100.00 | |
| Cash | 1,100.00 | ||
| i. | Bank Charges | 125.00 | |
| Cash | 125.00 |
ekkarill92 answered 1 year agoRelated Solutions
Oscar’s Red Carpet Store maintains a checking account with Academy Bank. Oscar’s sells carpet each day...
Oscar’s Red Carpet Store maintains a checking account with
Academy Bank. Oscar’s sells carpet each day but makes bank deposits
only once per week. The following provides information from the
company’s cash ledger for the month ending February 28,
2021.
Date
Amount
No.
Date
Amount
Deposits:
2/4
$
2,000
Checks:
321
2/2
$
4,000
2/11
1,600
322
2/8
450
2/18
2,500
323
2/12
1,800
2/25
3,400
324
2/19
1,500
Cash receipts:
2/26-2/28
900
325
2/27
250
$
10,400
326
2/28...
[The following information applies to the questions displayed below.] Oscar’s Red Carpet Store maintains a checking...
[The following information applies to the questions displayed
below.]
Oscar’s Red Carpet Store maintains a checking account with
Academy Bank. Oscar’s sells carpet each day but makes bank deposits
only once per week. The following provides information from the
company’s cash ledger for the month ending February 28, 2018.
Date Amount No. Date Amount
Deposits: 2/4 $ 2,700 Checks: 321 2/2 $ 4,700
2/11 2,300 322 2/8 400
2/18 3,200 323 2/12 2,500
2/25 4,100 324 2/19 2,200
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Service charges -350
NSF checks -1,600
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Balance, October 1, 2018
$
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Deposits
86,000
Checks processed
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Service charges
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NSF checks
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Harrison Company maintains a checking account at the First National City Bank. The bank provides a...
Harrison Company maintains a checking account at the
First National City Bank. The bank provides a bank statement along
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bank statement included the following information:
Balance, July 1, 2021
$
56,678
Deposits
180,300
Checks processed
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)
Service charges
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NSF checks
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Monthly payment on note, deducted directly by bank from
account
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Balance, July 31, 2021
$
38,178...
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Service charges
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NSF checks
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Gato Painting Company maintains a checking account at American Bank. Bank statements are prepared at the...
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$
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December...
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