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Allowance for Doubtful Accounts has a credit balance of $500 at the end of the year...

Allowance for Doubtful Accounts has a credit balance of $500 at the end of the year (before adjustment), and bad debt expense is estimated at 2% of credit sales. If credit sales are $848,200, the amount of the adjusting entry to record the estimated uncollectible accounts receivable

In the normal operation of business, you receive a check from a customer and deposit it into your checking account. With your bank statement, you are advised that this check for $775 is "NSF." The bank also informs you that due to the amount of activity on your business account the monthly service charge is $75. During a bank reconciliation, you will a. subtract both values from balance according to books b. add both values to balance according to bank c. subtract both values from balance according to bank d. add both values to balance according to books

A $170 petty cash fund has cash of $24 and receipts of $153. The journal entry to replenish the account would include a a. credit to Cash for $170 b. credit to Petty Cash for $153 c. credit to Cash Short and Over for $7 d. debit to Cash for $24

Solutions

Expert Solution

Solution 1 :

Total required Allowance for doubtful debts is 2% of credit sale

credit sales = 848200

allowance to be made = 848200*8%= 16964 usd

credit balance already available = 500

Now allowance to be provided = 16964 - 500 = 16464

THE amount of the adjusting entry to record uncollectible = 16464

journal for the above :

Debit : Profit and loss Account 16464

Credit : Allowance for Doubtful debts. 16464

Solution 2 :

Bank reconciliation Statement

Option : "B"

Bank charges deducted in the passbook and cheques deposited to bank but dishonoured  are to be Added to the Passbook ie...., Add both values to the balance according to the bank

Solution 3:

Under imprest petty cash system the opening and closing balanced of petty cash are to be equal

so in 170usd petty cash fund , always the balance to be 170usd only

given in the problem : Available cash = 24usd

receipts = 153

but for available 24 usd , receipts should be 146(170-24)

the diff between 153 and 146 = 153-146 = 7usd is Cash ovearge

The replenishing entry goes as follows

Debit: Payments 153

credit: cash short and over 7

credit: Cash 146

so correct option is "C"

ekkarill92 answered 1 year ago
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