Chapter 1 Problem 4-8
a. Balance per bank 3,500,000
Add: Undeposited collections 550,000
NSF check 50,000
DM for safety deposit 5,000
Unrecorded check 125,000 730,000
Total 4,230,000
Less: Checks outstanding 650,000
Overstatement of creditor’s check 270,000
Understatement of customer’s check 180,000 1,100,000
Balance per book 3,130,000
b. Adjusting entries:
1. Cash in bank 450,000
Accounts payable 270,000
Accounts receivable 180,000
2. Accounts receivable 50,000
Bank service charge 5,000
Accounts payable 125,000
Cash in bank 180,000
c. Balance per book 3,130,000
Overstatement of creditor’s check 270,000
Understatement of customer’s check 180,000
Total 3,580,000
Less: NSF check 50,000
DM for safety box 5,000
Unrecorded check 125,000 180,000
Adjusted book balance 3,400,000
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