statement for Allen Co. indicates a balance of $8,000.00 on June 30, 2025. After
ID: 2587543 • Letter: S
Question
statement for Allen Co. indicates a balance of $8,000.00 on June 30, 2025. After ne Prepare a bank joumals for June had been posted, the cash account had a balance of $3,675.00. reconciliation on the basis of the following reconciling items: Cash sales of $342 had been erroneously recorded in the cash receipts journal as $324. Deposits in transit not recorded by bank, $500.00. Bank debit memorandum for service charges, $25.00. Bank credit memorandum for note collected by bank, $2850, including $50 interest. Bank debit memorandum for $218.00 NSF (not sufficient funds) check from Alice Bell, a customer Checks outstanding, $2,200.00. (a) (b) (c) (d) (e) (f) After preparing the bank reconciliation for Allen Co. for June 30, 2025, record the appropriate journal entries that would be necessary. Present entries to record the following transactions: Established a petty cash fund of $350. The petty cash fund now has a balance of $75.80. Replenished the fund, based on the following disbursements as indicated by a summary of the petty cash receipts: office supplies expense, $89.50; miscellaneous administrative expense, $108.75; and miscellaneous selling expense, $65.60. Increased the petty cash fund to $400. (a) (b) (c) Determine the amount to be added to Allowance for Doubtful Accounts in each of the following cases. Indicate the ending balance in each case. Credit balance of $400 in the allowance account just prior to adjustment. Analysis of accounts receivable indicates doubtful accounts of $8,500. (a)
Explanation / Answer
PART-1)
Cash balance according to bank statement
8000
Plus: deposits in transit not recorded by bank
500
Minus: outstanding checks
-2200
Adjusted balance
6300
Cash balance according to depositor's records
3675
Plus: Note collected by bank, including int
2850
Plus: Error in recording cash sales
18
Minus: NSF check from Alice Bell
-218
Minus: Bank service charges
-25
Adjusted balance
6300
Journal entries:
1) Dr. Cash 2,868.00
Cr, Notes Receivable 2,800.00
Cr. Interest Revenue 50.00
Cr. Sales 18.00
2) Dr. Accounts Receivable-Alice Bell 218.00
Dr. Miscellaneous Administrative Expense 25.00
Cr. Cash 243
PART-2)
1) Dr. Petty Cash 350.00
Cr. Cash 350.00
2) Dr. Office Supplies Expense 89.50
Dr. Miscellaneous Administrative Expense 108.75
Dr. Miscellaneous Selling Expense 65.60
Dr. Cash Short and Over 10.35
Cr. Cash 274.20
3) Dr. Petty Cash 50.00
Cr. Cash 50.00
PART-3)
1) Credit balance of $400 in the allowance account just prior to adjustment. Analysis of account receivable indicaes doubtul accounts of $8,500
Solution: Amount added: $8,100 Ending balance: $8,500
2) Credit balance of $400 in the allowance account just prior to adjustment. Uncollectible accounts are estimated at 2% of sales, which totaled $1,000,000 for the year
Solution: Amount added: $20,000 Ending balance: $20,400
Cash balance according to bank statement
8000
Plus: deposits in transit not recorded by bank
500
Minus: outstanding checks
-2200
Adjusted balance
6300
Cash balance according to depositor's records
3675
Plus: Note collected by bank, including int
2850
Plus: Error in recording cash sales
18
Minus: NSF check from Alice Bell
-218
Minus: Bank service charges
-25
Adjusted balance
6300
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