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Masters Company’s bank statement showed a balance of $48,000 as at 30th November

By December 6, 2021No Comments

Masters Company’s bank statement showed a balance of $48,000 as at 30th November2021.The book showed a cash balance S44,000 as at 30th November 2021.As anaccountant,you need to prepare the bank reconciliation at 30th November,using thefollowing information:1.The company’s new accounting clerk erroneously recorded S7,200 as salary expensespaid to the part-time tea lady,but the check amount should be $7,100.2.A check $400 issued by a customer,Small Ltd.,deposited previously was debited bybank because of non-sufficient fund.3.The company had a total check deposit of S84,000 during November,but the bankshowed only deposits of $46,000.No deposit-in-transit was carried forward from lastmonth.4.Hifi Ltd.directly deposited $27,900 to the company’s bank account to settle a notereceivable (Ignore interest).5.Examination of the paid checks revealed that two checks amounting to $15,200 hadnot been paid by the bank.6.Service charge of $800 was debited by the bank.Required:(a)Prepare a bank reconciliation statement as at 30th November 2021.Show yourworkings.(b)Prepare the journal entries that should be made in the book of Masters Companyas a result of the above bank reconciliation.Part IIBig Ltd.used the statement of financial position approach to estimate uncollectibleaccount receivable.On 1 January 2021,The Allowance for Impairment showed a creditbalance of S15,000.During 2021,$120,000 of specific accounts receivable were writtenoff as uncollectible.Of these accounts written off,receivables totaling $20,000 weresubsequently collected.The aging schedule of the accounts receivable as at 31December was as follows:Days past dueAccountsEstimatedreceivableuncollectiblepercentageCurrent$550.0001%1-60 days250.0004%61-120days80.0006%Over 120 days20.0008%$900.000Required:(a)Prepare the journal entries to record the amounts written off during 2021.(b)Prepare the journal entries to record the S20,000 in accounts receivable that weresubsequently collected.(c)(①)Calculate the required balance of Allowance of impairment at3 1 December2021(show your workings).(ii)Calculate the amount of the Impairment Loss of Receivable to be adjustedfor the year (show your workings).(d)Prepare the adjusting entries to bring the Allowance for Impairment to the properamount on 31 December 2021.



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