Questions -
Q1. In the process of reconciling Marks Enterprises' bank statement for September, Mr. Marks compiles the following information:
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Cash balance per company books on September 30
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$6,230
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Deposits in transit at month-end
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$1,390
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Outstanding checks at month-end
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$710
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Bank charge for printing new checks
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$90
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Note receivable and interest collected by bank on Marks' behalf
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$680
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A check given to Marks during the month by a customer is returned by the bank as NSF
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$570
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The adjusted cash balance per the books on September 30 is:
$5,750
$6,820
$4,150
$8,070
$6,250
Q2. The following information is available for Holland Company at December 31:
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Money market fund balance
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$2,920
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Certificate of deposit maturing June 30 of next year
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$16,300
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Postdated checks from customers
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$1,800
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Cash in bank account
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$23,731
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NSF checks from customers returned by bank
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$780
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Cash in petty cash fund
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$330
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Inventory of postage stamps
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$31
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U.S. Treasury bill purchased on December 15 and maturing on February 28 of following year
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$11,300
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Based on this information, Holland Company should report Cash and Cash Equivalents on December 31 of:
$38,281
$54,581
$40,861
$43,312
$39,301
Q3. The following information is taken from Hogan Company's December 31 balance sheet:
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Cash and cash equivalents
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$9,919
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Accounts receivable
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77,922
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Merchandise inventories
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67,862
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Prepaid expenses
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5,600
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Accounts payable
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$16,450
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Notes payable
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94,138
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Other current liabilities
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11,000
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If net credit sales and cost of goods sold for the current year were $604,000 and $359,700, respectively, the firm's days' sales uncollected for the year is (Use 365 days a year and round your final answer to one decimal place):
41.0 days
47.1 days
159.1 days
68.9 days
79.1 days
Q4. The following information is available for Johnson Manufacturing Company at June 30:
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Cash in bank account
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$7,955
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Inventory of postage stamps
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89
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Money market fund balance
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13,900
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Petty cash balance
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500
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NSF checks from customers returned by bank
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1,017
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Postdated checks received from customers
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766
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Money orders
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1,757
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A nine-month certificate of deposit maturing on December 31 of current year
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9,500
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Based on this information, Johnson Manufacturing Company should report Cash and Cash Equivalents on June 30 of:
$19,712
$23,372
$22,355
$24,112
$23,461
Q5. If a check correctly written and paid by the bank for $372 is incorrectly recorded in the company's books for $327, how should this error be treated on the bank reconciliation?
Subtract $45 from the bank's balance and add $45 to the book's balance.
Add $45 to the bank's balance.
Subtract $45 from the bank's balance.
Add $45 to the book balance.
Subtract $45 from the book balance.
Q6. On November 19, Hayes Company receives a $26,400, 60-day, 5% note from a customer as payment on his account. What adjusting entry should be made on the December 31 year-end? (Use 360 days a year. Do not round intermediate calculations.)
Debit Interest Receivable $66; credit Interest Revenue $66.
Debit Interest Receivable $154; credit Interest Revenue $154.
Debit Interest Revenue $154; credit Interest Receivable $154.
Debit Interest Receivable $220; credit Interest Revenue $220.
Debit Interest Revenue $220; credit Interest Receivable $220.
Q7. MixRecording Studios purchased $8,000 in electronic components from TechCom. MixRecording Studios signed a 90-day, 8% promissory note for $8,000. If the note is dishonored, what is the amount due on the MixRecording Studios? (Use 360 days a year. Do not round intermediate calculations.)
$8,330
$8,160
$8,250
$160
$8,000
Q8. The amount due on the maturity date of a $8,000, 90-day 8%, note receivable is (Use 360 days a year. Do not round intermediate calculations):
$7,360.
$8,000.
$8,640.
$8,160.
$7,840.
Q9. A company factored $55,000 of its accounts receivable and was charged a 2% factoring fee. The journal entry to record this transaction would include a:
Debit to Cash of $55,000, a credit to Factoring Fee Expense of $1,100, and credit to Accounts Receivable of $53,900.
Debit to Cash of $56,100 and a credit to Accounts Receivable of $56,100.
Debit to Cash of $55,000 and a credit to Notes Payable of $55,000.
Debit to Cash of $55,000 and a credit to Accounts Receivable of $55,000.
Debit to Cash of $53,900, a debit to Factoring Fee Expense of $1,100, and a credit to Accounts Receivable of $55,000.
Q10. Teller purchased merchandise from TechCom on October 17 of the current year and TechCom accepted Teller's $8,400, 90-day, 8% note. What entry should TechCom make on January 15 of the next year when the note is paid? (Use 360 days a year. Do not round intermediate calculations.)
Debit Cash $8,568; credit Notes Receivable $8,568.
Debit Cash $8,568; credit Interest Revenue $28; credit Interest Receivable $140; credit Notes Receivable $8,400.
Debit Cash $4,920; credit Interest Revenue $100; credit Interest Receivable $20; credit Notes Receivable $4,800.
Debit Notes Receivable $8,400; debit Interest Receivable $168; credit Sales $8,568.
Debit Cash $8,568; credit Interest Revenue $168; credit Notes Receivable $8,400.