Assignment 1 HRM210 W2021
Name:_________________________________________ Student ID:____________________________ Date:_______________
1. Willard Company established a $400 petty cash fund on September 9, 2017. On September 30, the fund had $159.40
in cash along with receipts for these expenditures: transportation-in, $32.45; office supplies, $113.55; and repairs
expense, $87.60. Willard uses the perpetual method to account for merchandise inventory. The petty cashier could not
account for the $7.00 shortage in the fund.
a. Prepare the September 9 entry to establish the fund. (If no entry is required for a transaction/event, select "No
journal entry required" in the first account field.) Total Points: 2
b. Prepare a summary of the petty cash payments and record the entry on September 30 to reimburse the fund and
reduce it to $250. (If no entry is required for a transaction/event, select "No journal entry required" in the first
account field. Round your answers to 2 decimal places.) Total Points: 8 for the summary and 5 for the entries
No Date General Journal Debit Credit
1 Sep 9, 2017 Petty Cash
Cash
WILLARD COMPANY
PETTY CASH PAYMENTS REPORT
September 9-30, 2017
Receipts:
Total Receipts
Fund Total
Less: Cash remaining
Equals: Cash required to replenish petty cash
Cash short/over
No Date General Journal Debit Credit
1 Sep 30, 2017
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Assignment 1 HRM210 W2021
Name:_________________________________________ Student ID:____________________________ Date:_______________
2. The following information was available to reconcile Montrose Company’s book balance of Cash with its bank
statement balance as of October 31, 2020:
a. After all posting was completed on October 31, the company’s Cash account had a $13,219 debit balance
but its bank statement showed a $29,355 balance.
b. Cheques #296 for $1,334 and #307 for $12,754 were outstanding on the September 30 bank reconciliation.
Cheque #307 was returned with the October cancelled cheques, but cheque #296 was not. It was also found
that cheque #315 for $893 and cheque #321 for $2,000, both written in October, were not among the
cancelled cheques returned with the statement. (Hint: Review page 489 concerning cancelled cheques)
c. In comparing the cancelled cheques returned by the bank with the entries in the accounting records, it was
found that cheque #320 for the October rent was correctly written for $4,090 but was erroneously entered in
the accounting records as $4,900.
d. A credit memo enclosed with the bank statement indicated that there was an electronic fund transfer related
to a customer payment for $21,400. A $120 bank service charge was deducted. This transaction was not
recorded by Montrose before receiving the bank statement.
e. A debit memo for $3,251 listed a $3,202 NSF cheque plus a $49 NSF charge. The cheque had been
received from a customer, Jefferson Tyler. Montrose had not recorded this bounced cheque before receiving
the statement.
f. Also enclosed with the statement was a $74 debit memo for bank services. It had not been recorded
because no previous notification had been received.
g. The October 31 cash receipts, $6,856, were placed in the bank’s night depository after banking hours on
that date and this amount did not appear on the bank statement.
Required:
Prepare a bank reconciliation for the company as of October 31, 2020. Total Points: 11
MONTROSE COMPANY
Bank Reconciliation
October 31, 2020
Bank Statement Book Statement
Bank Statement Balance Book Balance Of Cash
Add: Add:
Deduct: Deduct:
Adjusted bank balance Adjusted book balance
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Assignment 1 HRM210 W2021
Name:_________________________________________ Student ID:____________________________ Date:_______________
Prepare the General Journal entries necessary to bring the company’s book balance of Cash into agreement with
the reconciled balance. Total Points: 9
No Date General Journal Debit Credit
1 Oct 31
2 Oct 31
3 Oct 31
4 Oct 31
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Assignment 1 HRM210 W2021
Name:_________________________________________ Student ID:____________________________ Date:_______________
3. BeleVu Supplies showed the following selected adjusted balances at its December 31, 2019, year-end:
Accounts Receivable
Dec. 31/19 Balance 490,000
Allowance for Doubtful Accounts
16,400 Dec. 31/19 Balance
During the year 2020, the following selected transactions occurred:
a. Sales totalled $2,800,000, of which 25% were cash sales (cost of sales $1,804,000).
b. Sales returns were $108,000, half regarding credit sales. The returned merchandise was scrapped.
c. An account for $24,000 was recovered.
d. Several accounts were written off; $26,000.
e. Collections from credit customers totalled $1,790,000 (excluding the recovery in (c) above).
Part A
Required:
1. Journalize transactions (a) through (e). You may find it useful to post your entries to T-accounts for Accounts
Receivable and Allowance for Doubtful Accounts. (The first entry has been done for you. If no entry is required for a
transaction/event, select "No journal entry required" in the first account field.) Total Points: 11
ACCOUNT NAE DEBIT CREDIT
a) cash 700,000
Accounts receivable 2,100,000
sales 2,800,000
Cost of Goods Sold 1,804,000
Merchandise Inventory 1,804,000
b)
c)
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Assignment 1 HRM210 W2021
Name:_________________________________________ Student ID:____________________________ Date:_______________
d)
e)
Part B Total Points: 5
2. Prepare the December 31, 2020, adjusting entry to estimate bad debts assuming that uncollectible accounts are
estimated to be 1% of net credit sales.
Dec. 31
Name of Account Debit Credit
3. What will be the balance of the Allowance for Doubtful Accounts on the December 31, 2020, balance sheet.
4. What will bad debt expense be on the income statement for the year ended December 31, 2020?
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Assignment 1 HRM210 W2021
Name:_________________________________________ Student ID:____________________________ Date:_______________
Part C Total Points: 7
5. Prepare the December 31, 2020, adjusting entry to estimate bad debts assuming that uncollectible accounts are
estimated to be 3% of outstanding receivables.
Name of Account Debit Credit
Calculations:
Allowance for Doubtful Accounts
Accounts Receivable
6. What will be the balance of the Allowance for Doubtful Accounts on the December 31, 2020, balance sheet.
7. What will bad debt expense be on the income statement for the year ended December 31, 2020?
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Assignment 1 HRM210 W2021
Name:_________________________________________ Student ID:____________________________ Date:_______________
4. Following are transactions of The Barnett Company:
2017
Dec. 16 Accepted a $22,000, 60-day, 5% note dated this day in granting Carmel Karuthers a time extension on her past-
due account.
Dec. 31 Made an adjusting entry to record the accrued interest on the Karuthers note.
Dec. 31 Closed the Interest income account.
2018
Feb. 14 Received Karuthers’ payment for the principal and interest on the note dated December 16.
Mar. 2 Accepted an $8,000, 4%, 90-day note dated this day in granting a time extension on the past-due account of
ATW Company.
Prepare journal entries to record The Barnett Company’s transactions. (Assume 365 days in a year. If no entry is
required for a transaction/event, select "No journal entry required" in the first account field. Round your answers
to 2 decimal places.) Total Points: 12
Date Account Debit Credit
Dec 16
Dec 31
Dec 31
Date Account Debit Credit
Feb 14
Mar 2
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