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155. Marbel had $2,816 million in sales and $555 million in ending accounts receivable for the
current period. For the same period, Maxtel reported $4,885 million in sales and $491 million in
ending accounts receivable. Calculate the days' sales uncollected for both companies as of the
end of the current period. Which company is doing a better job in managing the collection of its
receivables?
156. A company reported net sales for Year 1 of $285,000 and $575,000 for Year 2. The year-
end balances of accounts receivable were $49,000 for Year 1 and $85,000 for Year 2. Calculate
the days' sales uncollected at the end of each year for this company and describe any changes in
the apparent liquidity of the company's receivables.
157. On August 17, at the end of the day, the cash register's record shows $957, but the count of
cash in the register is $965. Prepare the general journal entry to record the day's cash sales.
158. A company established a petty cash fund of $100 on September 1. On September 10, the
petty cash fund was replenished when there was $16 remaining and there were petty cash
receipts for: office supplies, $27; transportation-in on inventory purchased, $32; and postage,
$22. On September 15, the petty cash fund was increased to $125 in total. Record the above
transactions in general journal form.
159. A petty cash fund was originally established with a check for $150. In the petty cash fund
on December 31 (the period-end), you find the following:
Petty cash receipts:
Postage........................................................
$43.50
Office supplies ...........................................
51.85
Office equipment repair ..............................
49.00
Cash .............................................................
4.25
Prepare the general journal entry to record the replenishment of the petty cash fund on December
31.
160. A company established a $400 petty cash fund by issuing a check to the custodian on
October 1. On October 15, the petty cash fund was replenished and increased to $1,000 in total.
The contents of the petty cash fund at the time of the October 15 replenishment were:
Currency and coins .............................................................
$ 12
Petty cash receipts for:
Transportation-in for inventory .......................................
$ 39
Delivery expense ..............................................................
138
Repairs to office equipment .............................................
47
Postage ..............................................................................
114
Entertainment of customers .............................................
53
391
Total .....................................................................................
$ 403
Prepare the general journal entry to record both the reimbursement and the increase of the petty
fund on October 15.
161. On November 1, a company established a $90 petty cash fund. On November 12, the petty
cash fund contains $3 in cash and the following paid petty cash receipts: transportation-in on
merchandise inventory $14.25; postage, $34.50; and office supplies, $36. Give the general
journal entry to reimburse the fund and to increase its amount to $150 on November 12.
162. A company established a petty cash fund in February of the current year and experienced
the following transactions affecting the fund during February:
Feb 1 Established a $250 petty cash fund.
5 Paid $55 to acquire office supplies.
8 Reimbursed the company controller for $30 spent on beverages for recruits
18 Paid $45 for postage.
20 Paid $65 for C.O.D. charges on merchandise inventory, terms FOB shipping
point.
25 Paid $50 for janitorial services.
28 When sorting the petty cash receipts to replenish the fund, the custodian noted
that there were receipts totaling $245 and $10 cash remaining. Also, a decision
was made to reduce the fund by $50 to a total of $200.
Prepare the journal entries to establish the find, reimburse the fund and to reduce its amount on
February 28.
163. Following are seven items a through g that would cause Xavier Company's book balance of
cash to differ from its bank statement balance of cash.
a. A service charge imposed by the bank.
b. A check listed as outstanding on the previous period's reconciliation and still outstanding at
the end of this month.
c. A customer's check returned by the bank is marked "Not Sufficient Funds(NSF)".
d. A deposit that was mailed to the bank on the last day of the current month and is unrecorded
on this month's bank statement.
e. A check paid by the bank at its correct $190 amount was recorded in error in the company's
Check Register at $109.
f. An unrecorded credit memorandum indicated that bank had collected a note receivable for
Xavier Company and deposited the proceeds in the company's account.
g. A check was written in the current period that is not yet paid or returned by the bank.
Indicate where each item a through g would appear on Xavier Company's bank reconciliation by
placing its identifying letter in the parentheses in the proper section of the form below.
Bank statement cash balance
Book balance of cash
Add: ( )
Add: ( )
( )
( )
( )
( )
( )
( )
Deduct: ( )
Deduct: ( )
( )
( )
( )
( )
( )
( )
Reconciled balance................
Reconciled balance................
8-67
164. The following information is available for the Avisa Company for the month of November.
a. On November 30, after all transactions have been recorded, the balance in the company's Cash
account has a balance of $27,202.
b. The company's bank statement shows a balance on November 30 of $29,279.
c. Outstanding checks at November 30 include check #3030 in the amount of $1,525 and check
#3556 in the amount of $1,459.
d. A credit memo included with the bank statement indicates that the bank collected $780 on a
noninterest-bearing note receivable for Avisa. The bank deducted a $10 collection fee, and
credited the remainder of $770 to Avisa's account.
e. A debit memo included with the bank statement shows a $67 NSF check from a customer, J.
Brown.
f. A deposit placed in the bank's night depository on November 30 totaled $1,675, and did not
appear on the bank statement.
g. Examination of the checks on the bank statement with the entries in the accounting records
reveals that check #3445 for the payment of an account payable was correctly written for $2,450,
but was recorded in the accounting records as $2,540.
h. Included with the bank statement was a debit memorandum in the amount of $25 for bank
service charges. It has not been recorded on the company's books.
1. Prepare the November bank reconciliation for the Avisa Company.
2. Prepare the general journal entries to bring the company's book balance of cash into
conformity with the reconciled balance as of November 30.
165. Brown Company's bank statement for September 30 showed a cash balance of $1,350. The
company's Cash account in its general ledger showed a $995 debit balance. The following
information was also available as of September 30.
a. A $125 debit memoranda is included with the bank statement and dealt with a customer's
check for $100 marked NSF and returned to Brown Company by the bank. In addition, the bank
charged the company's a $25 processing fee.
b. The September 30 cash receipts, $1,250, were placed in the bank's night depository after
banking hours on that date and this amount did not appear on the September 30 bank statement.
c. A $15 debit memorandum for checks printed by the September 30 bank was included with the
canceled checks.
d. Outstanding checks amounted to $1,145.
e. A customer's note for $900 was collected by the bank. A collection fee of $25 was deducted
by the bank and the difference was deposited in the account.
f. Included with the canceled checks was a check for $275, drawn on another company, Browne
Inc.
1. Prepare a bank reconciliation as of September 30.
2. Prepare any necessary adjusting journal entries necessary as a result of the bank
reconciliation.
Answer:
8-70
166. The following information is available for the Edwards Company for its March 31 bank
reconciliation:
From the March 31 bank statement:
Previous Balance
Total Checks and
Total Deposits and
Current Balance
$10,908
$7,805
$11,905
$15,008
Checks and Debits
Deposits and Credits
Daily Balance
Date
No.
Amount
Date
Amount
Date
Amount
03/03
2874
1,210
03/02
4,340
03/01
10,908
03/11
2906
3,850
03/27
7,270
03/02
15,248
03/15
2905
170
03/31
295
IN
03/03
14,038
03/25
2909
725
03/11
10,188
03/29
2908
1,350
03/15
10,018
03/30
500
NSF
03/25
9,293
03/27
16,563
03/29
15,213
03/30
14,713
_
_
03/31
15,008
8-71
NSF: A check from a customer, Cook Co. in payment of their account.
IN: Interest earned on the account.
From the Edwards Company's accounting records:
Cash Receipts Deposited
Cash Disbursements
Date
Cash Debit
Check No.
Cash Debit
March
7
4,340
2905
170
27
7,270
2906
3,850
31
2090
2907
460
13, 700
2908
1,350
2909
725
2910
340
6895
Cash
Acct. No. 101
Date
Explanation
PR
Debit
Credit
Balance
February
28
Balance
9,698
March
31
Total receipts
R4
13,700
23,398
31
Total disbursements
D5
6,895
16,503
1. Based on the above information, prepare a bank reconciliation for the Edwards Company.
2. Prepare the necessary general journal entries to adjust cash to the reconciled balance.
Answer:
2.
167. On June 3, a company received and recorded a $4,500 invoice for merchandise on which
the terms were 2/10, n/60. The company records invoices at net amounts. On June 23, the
company discovered that the invoice had been incorrectly filed and the discount lost. Prepare the
June 3 general journal entry to record the purchase, the June 23 entry to record the discount lost,
and the August 2 entry to record payment of the invoice.
168. A company purchased merchandise inventory costing $15,000 with credit terms of 2/10,
n/30 on November 7. On November 15, the company paid 1/3 of the amount due. The remaining
balance was paid on December 7.
Required:
a. Record the journal entries related to this transaction using the gross method of recording
purchases.
b. Record the journal entries related to this transaction using the net method of recording
purchases.
169. On August 25, a company purchased $5,000 worth of merchandise on terms 2/10, n/30; on
September 4, the amount due was paid. Using the net method of recording purchases, prepare
general journal entries to record (a) the purchase on August 25, and (b) the cash payment on
September 4.
