Question
Help please explain entries and calculations In seperate boxes for numbers 1-4 so i can learn to do it! Thank You.
1.) Bank Reconciliation
2.) General Journal
3.) Bad Debt Calculations
4.) Notes Recievable Calculations
In June, Bill commented to you that he could never figure out his bank statement, “it never matches the balance in my accounting records” he tells you. So you explain that a bank reconciliation is a tool used to balance the bank statement to the accounting books. He gives you his bank statement for June, 2014 (shown below). The general ledger shows a balance for the account cash of $14,319.00 on June 30, 2014 (detail transactions below). Bill’s business only has one checking account and no other cash accounts.
Bill has begun to have problems collecting some of his credit accounts and is considering writing off a couple of customer account balances. He asks you how these bad debts should be recorded and has asked you to begin recording bad debt using the allowance method for June, 2014. Selected account balances at the end of June, 2014 are:
Sales $7,200
Sales on Credit $2,900
Accounts Receivable $3,200
As a result of increased focus on collecting accounts receivable, Bill has decided to extend credit for one customer, Alan Jones, who owes Bill’s Lawn Care $500. Bill and Alan have agreed to a 90-day 6% note for $500 issued on June 5, 2014.
Instructions:
Using the bank statement and the general ledger, prepare a bank reconciliation for Bill’s Lawn Care as of June 30, 2014. Record the necessary journal entries to adjust the books for the appropriate reconciling items. Start with Page 6 for the journal entries. Explanations are optional.
Using the information given above, calculate the amount of bad debt using:
Percentage of Sales on Credit = 1.5%
Percentage of Accounts Receivable = 1%
Using the chart of accounts, record the journal entry for bad debt expense for Bill’s Lawn Care using the percentage of sales on credit method.
Using the note receivable information above and the chart of accounts, record the following entries in the general journal (continue these entries on Page 6):
Receipt of the note in payment of the accounts receivable balance.
Adjusting entry at the end of June, 2014 for the note receivable. (Round interest calculations to two decimals)
Assume that Alan pays the note and interest in full on the due date, record the necessary journal entry. Assume that interest has been accrued at the end of each month.
Assume that Alan defaults on the note and interest on the due date, record the necessary journal entry. Assume that interest has been accrued at the end of each month.
Please note that the calculation pages in the Excel template are required and graded. Please show your work on those pages.
CHECKING ACCOUNT DETAIL:
DATE
TRANSACTION
TYPE & NUMBER
AMOUNT
BALANCE
BEGINNING BALANCE
$12,850.00
6/2/2014
CHECK #1570
226.00
12,624.00
6/5/2014
CHECK #1571
83.00
12,541.00
6/6/2014
EFT #43
127.00
12,414.00
6/10/2014
DEPOSIT #104
1,550.00
13,964.00
6/15/2014
CHECK #1572
145.00
13,819.00
6/15/2014
CHECK #1573
185.00
13,634.00
6/20/2014
DEPOSIT #105
885.00
14,519.00
6/24/2014
EFT #44
143.00
14,376.00
6/28/2014
CHECK #1574
87.00
14,289.00
6/28/2014
CHECK #1575
95.00
14,194.00
6/30/2014
DEPOSIT #106
425.00
14,619.00
6/30/2014
CHECK #1576
155.00
14,464.00
6/30/2014
CHECK #1577
145.00
$14,319.00
BANK STATEMENT:
FIRST NATIONAL BANK
ACCOUNT SUMMARY JUNE 30, 2014
BEGINNING BALANCE
$12,850.00
PAYMENTS
$1,021.00
DEPOSITS
2,440.00
FEES
20.00
ENDING BALANCE
$14,249.00
PAYMENTS
DATE
REFERENCE
AMOUNT
6/5/2014
1570
$266.00
6/9/2014
1571
83.00
6/10/2014
43
127.00
6/19/2014
1572
145.00
6/28/2014
1573
185.00
6/28/2014
NSF
120.00
6/30/2014
1575
95.00
TOTAL PAYMENTS
$1,021.00
DEPOSITS
DATE
REFERENCE
AMOUNT
6/11/2014
104
$1,550.00
6/23/2014
105
885.00
6/30/2014
INTEREST
5.00
TOTAL DEPOSITS
$2,440.00
FEES
6/30/2014
SVC CHG
$20.00
TOTAL FEES
$20.00
Additional Information:Check #1570 was written for $266.00, but was recorded incorrectly in the general ledger. The check was for fuel.
DATE
TRANSACTION
TYPE & NUMBER
AMOUNT
BALANCE
BEGINNING BALANCE
$12,850.00
6/2/2014
CHECK #1570
226.00
12,624.00
6/5/2014
CHECK #1571
83.00
12,541.00
6/6/2014
EFT #43
127.00
12,414.00
6/10/2014
DEPOSIT #104
1,550.00
13,964.00
6/15/2014
CHECK #1572
145.00
13,819.00
6/15/2014
CHECK #1573
185.00
13,634.00
6/20/2014
DEPOSIT #105
885.00
14,519.00
6/24/2014
EFT #44
143.00
14,376.00
6/28/2014
CHECK #1574
87.00
14,289.00
6/28/2014
CHECK #1575
95.00
14,194.00
6/30/2014
DEPOSIT #106
425.00
14,619.00
6/30/2014
CHECK #1576
155.00
14,464.00
6/30/2014
CHECK #1577
145.00
$14,319.00
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