1) 808 Inc. has the following account balances at the end of the current fiscal year: Revenues...
Question:
1) 808 Inc. has the following account balances at the end of the current fiscal year:
Revenues (all credit): $ 1,350,000
Accounts Receivable: $450,000
Allowance for Doubtful accounts: $13,400
Prepare the journal entry to record bad debt expense and to adjust the allowance for doubtful accounts based on the following (note that there were no write-offs in the current period):
Using the percentage of total credit sales assuming a bad debt loss rate of 1.5%
Using an aging of accounts receivable based on the below:
Accounts Receivable aging:
Aging | Amount | Estimated Bad Debt Rate |
0-30 days | 250,000 | 0.5% |
31-60 days | 125,000 | 5% |
61-90 days | 50,000 | 10% |
90+ days | 25,000 | 50% |
2) Note the following information related to a company’s cash account :
Cash balancer per bank, 12/31/122 | 9,610 |
Check #6832 cleared the bank for $240, but erroneously recorded by company for $268 | |
Outstanding checks | 2,417 |
Deposit by ABC Inc erroneously recorded to the company by the bank | 486 |
NSF check returned by bank | 281 |
Cash balance per books, 12/31/22 | 7,430 |
December 2022 interest per bank | 30 |
Check mailed to bank for a deposit that had not reached the bank by 12/31/22 | 500 |
required :Prepare a bank reconciliation for the company for the month ended December 2022.
Prepare any journal entries that should be made based on the reconciliation prepared.
Fraud examination
ISBN: 978-0538470841
4th edition
Authors: Steve Albrecht, Chad Albrecht, Conan Albrecht, Mark zimbelma