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Friday, August 6, 2010

Valix Finacc vol 1 Problem 4-4

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 1 Problem 4-4


Balance per book                                                                                                  2,840,000
Add: CM for note collected                                                                                      270,000
Total                                                                                                                       3,110,000
Less: DM for service charge                                                                                           5,000
Adjusted book balance                                                                                         3,105,000

Balance per bank                                                                                                   3,265,000       
Add: Deposit in transit                                                                                   450,000  
Total                                                                                                                       3,715,000  
Less: Outstanding checks:                                                   
              No. 116                                                                                    60,000                            
                     122                                                                                  180,000
                    124                                                                                  120,000
                     125                                                                                  250,000          610,000  
Adjusted bank balance                                                                                         3,105,000

 Adjusting entries:

1. Cash in bank                                                                                   270,000
    Bank service charge                                                              10,000
Note receivable                                                                                           250,000
Interest income                                                                                              30,000

2. Bank service charge                                                                           5,000
Cash in bank                                                                                                    5,000

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