PR$\mathrm{.}08\mathrm{.}03.$ALGO $($Algorithmic$)$

Bank Reconciliation and Entries

The cash account for Norwegian Medical Co$.$ at April $30$ indicated a balance of $$13,045.$ The bank statement indicated a balance of $$15,450$ on April $30.$ Comparing the bank statement and the

accompanying canceled checks and memos with the records revealed the following reconciling items:

a$.$ Checks outstanding totaled $$5,560.$

b$.$ A deposit of $$5,790,$ representing receipts of April $30,$ had been made too late to appear on the bank statement.

c$.$ The bank collected $$3,010$ on a $$2,860$ note, including interest of $$150.$

d$.$ A check for $$880$ returned with the statement had been incorrectly recorded by Norwegian Medical Co$.$ as $$800.$ The check was for the payment of an obligation to Universal Supply Co$.$ for

a purchase on account.

e$.$ A check drawn for $$30$ had been erroneously charged by the bank as $$300.$

f$.$ Bank service charges for April amounted to $$25.$ Required:

Prepare a bank reconciliation.

Journalize the necessary entries $($a$.)$ that increase cash and $($b$.)$ that decrease cash. The accounts have not been closed. If an amount box does not require an entry, leave it blank.

a$.$ April $30$

b$.$ April $30$

If a balance sheet is prepared for Norwegian Medical Co$.$ on April $30,$ what amount should be reported as cash?

$$ EX$\mathrm{.}10\mathrm{.}10.$ALGO $($Algorithmic$)$

Depreciation by Two Methods

A storage tank acquired at the beginning of the fiscal year at a cost of $$75,000$ has an estimated residual value of $$4,500$ and an estimated useful life of five years.

a$.$ Determine the amount of annual depreciation by the straight$-$line method.

b$.$ Determine the amount of depreciation for the first and second years computed by the double$-$declining$-$balance method. Do not round the double$-$declining balance rate. If required,

round your answers to the nearest dollar.

Depreciation

Year $1$

Year $2$ EX$\mathrm{.}09\mathrm{.}09.$ALGO $($Algorithmic$)$

Estimating Allowance for Doubtful Accounts

Kirchhoff Industries has a past history of uncollectible accounts, as shown below.

Percent

Estimate the allowance for doubtful accounts, based on the aging of receivables schedule below.

Kirchhoff Industries

Aging of Receivables Schedule