Additionally, Westerson's cash records reflects a balance of $270,553 on January 31, 2020, while its bank...
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Additionally, Westerson's cash records reflects a balance of $270,553 on January 31, 2020, while its bank statement balance was $255,000. A more detailed review reveals several reconciling items: i. Deposits in transit amounted to $25,000. ii. Included in the bank statement as at January 31, 2021 were the following memoranda: Credit Memorandum: a non-bearing interest note receivable for $5,000 was left at the bank for collection. The bank collected the amount which was credited to Westerson's account in January. • Debit Memorandum: $250 for service charges for the month of January 2021. iii. Outstanding cheques: • Cheque #255 for $2,550 • Cheque #256 for $3,675 • Cheque #257 for $675 iv. Review of the accounts revealed that cheque #260 for $5,255 was entered in the Westerson's records as $5,552. This was for utility expenses incurred and paid during January. v. Included in the company deposits for January 2021 was a cheque for $2,500, but the bank has returned this cheque as NSF. You then tum your attention to Westerson Inc.'s accounts receivables and how the company accounts for its uncollectible / bad debt accounts. Your investigation reveals that the company uses the percentage-of-receivables basis under the allowance method. The following aging schedule has been provided: UNCOLLECTIBLE AGE INTERVAL BALANCE (S) Not past due 350,000.00 1% 1-30 days past due 90,000.00 3% 31-60 days past due 17,000.00 6% 61-90 days past due 13,000.00 10% 91-80 days past due 9,400.00 60% Over 1 80 days past due 3,600,00 80% TOTAL 483,000.00 Additionally, Westerson's cash records reflects a balance of $270,553 on January 31, 2020, while its bank statement balance was $255,000. A more detailed review reveals several reconciling items: i. Deposits in transit amounted to $25,000. ii. Included in the bank statement as at January 31, 2021 were the following memoranda: Credit Memorandum: a non-bearing interest note receivable for $5,000 was left at the bank for collection. The bank collected the amount which was credited to Westerson's account in January. • Debit Memorandum: $250 for service charges for the month of January 2021. iii. Outstanding cheques: • Cheque #255 for $2,550 • Cheque #256 for $3,675 • Cheque #257 for $675 iv. Review of the accounts revealed that cheque #260 for $5,255 was entered in the Westerson's records as $5,552. This was for utility expenses incurred and paid during January. v. Included in the company deposits for January 2021 was a cheque for $2,500, but the bank has returned this cheque as NSF. You then tum your attention to Westerson Inc.'s accounts receivables and how the company accounts for its uncollectible / bad debt accounts. Your investigation reveals that the company uses the percentage-of-receivables basis under the allowance method. The following aging schedule has been provided: UNCOLLECTIBLE AGE INTERVAL BALANCE (S) Not past due 350,000.00 1% 1-30 days past due 90,000.00 3% 31-60 days past due 17,000.00 6% 61-90 days past due 13,000.00 10% 91-80 days past due 9,400.00 60% Over 1 80 days past due 3,600,00 80% TOTAL 483,000.00
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Solution1 Westerson Inc Bank Reconciliation January 312020 255000 25000 Cash Balance pe... View the full answer
Related Book For
College Accounting
ISBN: 978-1111528126
11th edition
Authors: Tracie Nobles, Cathy Scott, Douglas McQuaig, Patricia Bille
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