Chapter 1 Problem 4-6
Book balance 1,405,000
Add: Collection of note 2,500,000
Interest on note 150,000
Book error on check no. 175 45,000 2,695,000
Total 4,100,000
Less: Bank service charge 5,000
Payment for light and water 245,000
NSF check 220,000 470,000
Adjusted book balance 3,630,000
Bank balance 5,630,000
Add: Deposit in transit 750,000
Total 6,380,000
Less: Bank error 1,100,000
Outstanding checks 1,650,000 2,750,000
Adjusted bank balance 3,630,000
Adjusting entries:
1. Cash in bank 2,695,000
Note receivable 2,500,000
Interest income 150,000
Accounts payable 45,000
2. Bank service charge 5,000
Light and water 245,000
Accounts receivable 220,000
Cash in bank 470,000
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