b) On December 31, 2020, Watsonia Berhad had a cash balance per book of RM8,037.40.The bank statements from Affin Bank on the date showed a balance of RM6,824.60. Acomparison of the statement with the cash account revealed the following facts:1. Deposits in transit were RM3,823.30. Outstanding cheques at December, 31 totalledRM752.50.2. On December,18 the company issued cheque No. 1181 for RM846 to Gloxinia SdnBhd on account. The check, which cleared by the bank in December, was incorrectlyjournalized and posted by Watsonia Berhad for RM864.Page 2 of 5CONFIDENTIAL202109/SEM103/A3. Cash sales of RM955.20 on December, 21 were deposited in the bank. The cashreceipts journal entry and the deposit slip were incorrectly made for RM965.20. Thebank credited Watsonia Berhad for the correct amount.4. A RM4,500 note receivable was collected by the bank for Watsonia Berhad onDecember, 31 plus RM95 interest. The bank charged a collection fee of RM35. Nointerest has been accrued on the note. 5. On December 31, the bank statement showed an NSF charge of RM1,340 for a chequeissued by Dahlia, a customer; to Watsonia Berhad on account.6. The statement included a debit memo of RM80 for the printing of additional companycheques.7. Bank charges of RM740 shown on the bank statement have not been entered in thecompany's cash book.8. A monthly direct debit payable to ASTRO for RM550 was wrongly paid twice by thebank.Required:Prepare the bank reconciliation at 31 December 2020.

Bank reconciliation statement is prepared where an entry which is found in one book (Cash book or…

5. On December 31, the bank statement showed an NSF charge of RM1,340 for a cheque issued by Dahlia, a customer; to Watsonia Berhad on account. 6. The statement included a debit memo of RM80 for the printing of additional company cheques. 7. Bank charges of RM740 shown on the bank statement have not been entered in the company's cash book. 8. A monthly direct debit payable to ASTRO for RM550 was wrongly paid twice by the bank. Required: Prepare the bank reconciliation at 31 December 2020.

5. On December 31, the bank statement showed an NSF charge of RM1,340 for a cheque issued by Dahlia, a customer; to Watsonia Berhad on account. 6. The statement included a debit memo of RM80 for the printing of additional company cheques. 7. Bank charges of RM740 shown on the bank statement have not been entered in the company's cash book. 8. A monthly direct debit payable to ASTRO for RM550 was wrongly paid twice by the bank. Required: Prepare the bank reconciliation at 31 December 2020.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 22MC: A company collects an honored note with a maturity date of 24 months from establishment, a 10%...

See similar textbooks

Similar questions

Complex Balance Sheet Presented below is the unaudited balance sheet as of December 31, 2019, prepared by Zeus Manufacturing Corporations bookkeeper. Your company has been engaged to perform an audit, during which you discover the following information: 1. Checks totaling 14,000 in payment of accounts payable were mailed on December 31, 2019, but were not recorded until 2020. Late in December 2019, the bank returned a customers 2,000 check marked NSF, but no entry was made. Cash includes 100,000 restricted for building purposes. 2. Included in accounts receivable is a 30,000 note due on December 31, 2022, from Zeuss president. 3. During 2019, Zeus purchased 500 shares of common stock of a major corporation that supplies Zeus with raw materials. Total cost of this stock was 51,300, and fair value on December 31, 2019, was 51,300. Zeus plans to hold these shares indefinitely. 4. Treasury stock was recorded at cost when Zeus purchased 200 of its own shares for 32 per share in May 2019. This amount is included in investments. 5. On December 31, 2019, Zeus borrowed 500,000 from a bank in exchange for a 10% note payable, manning December 31, 2024. Equal principal payments are due December 31 of each year beginning in 2020. This note is collateralized by a 250,000 tract of land acquired as a potential future building site, which is included in land. 6. The mortgage payable requires 50,000 principal payments, plus interest, at the end of each month. Payments were made on January 31 and February 28, 2020. The balance of this mortgage was due June 30, 2020. On March 1, 2020, prior to issuance of the audited financial statements, Zeus consummated a non-cancelable agreement with the lender to refinance this mortgage. The new terms require 100,000 annual principal payments, plus interest, on February 28 of each year, beginning in 2021. The final payment is due February 28, 2028. 7. The lawsuit liability will be paid in 2020. 8. Of the total deferred tax liability; 5,000 is considered a current liability. 9. The current income tax expense reported in Zeuss 2019 income statement was 61,200. 10. The company was authorized to issue 100,000 shares of 50 par value common stock.
Cash Receipts from Customers Singleton Inc. had accounts receivable of $22,150 at January 1, 2019, and $26,850 at December 31, 2019. Net income for 2019 was $125,300 and sales revenue was $1,240,000. Required: Compute the amount of cash collected from customers using the direct method.
Inferring Accounts Receivable Amounts At the end of 2019, Karras Inc. had a debit balance of 141,120 in its accounts receivable. Additionally, Karras had a credit balance in its allowance for doubtful accounts of 4,350 and 9,420 at the beginning and end of the year, respectively. During the year, Karras made credit sales of 1,530,000, collected receivables in the amount of 1,445,700, and recorded bad debt expense of 83, 750. Required: Next Level Compute the amount of accounts receivable that Karras wrote off during the year and the amount of accounts receivable at the beginning of the year.
A company collects an honored note with a maturity date of 24 months from establishment, a 10% interest rate, and an initial loan amount of $30,000. Which accounts are used to record collection of the honored note at maturity date? A. Interest Revenue, Interest Expense, Cash B. Interest Receivable, Cash, Notes Receivable C. Interest Revenue, Interest Receivable, Cash, Notes Receivable D. Notes Receivable, Interest Revenue, Cash, Interest Expense
To demonstrate the difference between cash account activity and accrual basis profits (net income), note the amount each transaction affects cash and the amount each transaction affects net income. A. issued stock for cash $20,000 B. purchased supplies inventory on account $1,800 C. paid employee salaries; assume it was current days expenses $950 D. paid note payment to bank (principal only) $1,200 E. collected balance on accounts receivable $4,750
What is the journal entry to record an NSF check, from J. Smith for 250, that is returned with the bank statement? a. Cash 250 DR; NSF Check 250 CR b. Accounts Receivable 250 DR; Cash 250 CR c. NSF Check 250 DR; Accounts Receivable 250 CR d. Cash 250 DR; Accounts Receivable 250 CR e. Cash 250 DR; Miscellaneous Expense 250 DR
Provide journal entries to record each of the following transactions. For each, identify whether the transaction represents a source of cash (S), a use of cash (U), or neither (N). A. Paid $22,000 cash on bonds payable. B. Collected $12,600 cash for a note receivable. C. Declared a dividend to shareholders for $16,000, to be paid in the future. D. Paid $26,500 to suppliers for purchases on account. E. Purchased treasury stock for $18,000 cash.
Blue Company, an architectural firm, has a bookkeeper who maintains a cash receipts and disbursements journal. At the end of the year (2019), the company hires you to convert the cash receipts and disbursements into accrual basis revenues and expenses. The total cash receipts are summarized as follows. The accounts receivable from customers at the end of the year are 120,000. You note that the accounts receivable at the beginning of the year were 190,000. The cash sales included 30,000 of prepayments for services to be provided over the period January 1, 2019, through December 31, 2021. a. Compute the companys accrual basis gross income for 2019. b. Would you recommend that Blue use the cash method or the accrual method? Why? c. The company does not maintain an allowance for uncollectible accounts. Would you recommend that such an allowance be established for tax purposes? Explain.