Problem 1-1: Problem 1-2 Cash and Cash Equivalents
Problem 1-1: Problem 1-2 Cash and Cash Equivalents
Problem 1-1: Problem 1-2 Cash and Cash Equivalents
Adjusting Entries:
Accounts Receivable 250, 000
Cash 250, 000
Problem 1-7
2019 2020
May 2 Petty Cash Fund 10, 000 July 1 Petty Cash Fund 4, 000
Cash in Bank 10, 000 Supplies Expense 2, 000
Postage 1, 000
Transportation Expense 1, 000
29 Postage 1, 000
Supplies expense 3, 000
15 Petty Cash Fund 5, 000
Transportation Expense 2 500 Supplies Expense 1, 500
Miscellaneous Expense 1, 000 Postage Expense 1, 500
Cash in Bank 8, 000 Transportation Expense 1, 500
Miscellaneous Expense 500
June 3 Supplies Expense 2, 000 Cash In bank 12, 000
Postage 1, 000
Transportation Expense 1, 000
Petty Cash Fund 4, 000
2-8 Bank Reconciliation
Book Balance 5, 000, 000
CM-Book Balance 516, 000
Understated Check (180, 000)
Petty Cash Fund ( 10, 000)
Adjusted Book Balance 5, 326, 000
Adjusting Entries:
Cash in Bank 516, 000
Prepaid Interest 77, 000 (84, 000 X 11/12)
Interest Expense 7, 000 (84, 000 X 1/12)
Loan Payable 600, 000
(516, 000 X 86%)
DIT June 30 (squeeze) 500, 000 OIC June 30 (squeeze) 950, 000
Add: Book debits 3, 400, 000 Add: Bank credits 4, 200, 000
Total deposits to be credited 3, 900, 000 Total checks to be paid 5, 150, 000
Deposits credit by bank Check paid by bank:
Bank Credits 5, 000, 000 Bank debits 4, 020, 000
CM-Note Collected (1, 500, 000) 3, 500, 000 DM-Service Charge (20, 000) 4, 000, 000
DIT, July 31 400, 000 OIC July 31 1, 150, 000
Problem 3-4
June 30 Receipts Disbursement July 31
Book Balances 990, 000 710, 000 1, 200, 000 500, 000
Debit Memos:
Oct-Service Charge (5, 000) (5, 000)
Nov-Service Charge 10, 000 10, 000
Nov-NSF Check 50, 000 (50, 000)
Book Error:
Unrecorded Collections 45, 000 (45, 000)
N/R recorded or receipt 100, 000 (100, 000)
Adjusted book balances 1, 030, 000 565, 0000 1, 255, 000 340, 000
Bank Balances 1, 100, 000 500, 000 1, 000, 000 600, 000
Erroneous bank debit 10, 000 (10, 000)
Deposit in Transit:
Oct 31 45, 000 (45, 000)
Nov 30 120, 000 120, 000
Outstanding Checks
Oct 31 (125, 000) (125, 000)
Nov 30 380, 000 (380, 000)
Adjusted Bank Balances 1, 030, 000 565, 000 1, 255, 000 340, 000
Deposit in Transit, Oct 31 45, 000 Outstanding Checks, Oct 31 125, 000
Add: November book receipts: Add: November book disbursement
Book Debits 710, 000 Book Credits 1, 200, 000
N/R Recorded as receipt (100, 000) Oct 31-Service Charge (5, 000) 1, 195, 000
Unrecorded collections-Oct.31 45, 000__________ Total Checks to be paid by bank 1, 320, 000
Total Deposits to be credited by bank 610, 000 Checks Paid by bank:
Less: Deposits Credited by bank Bank Debits 1, 000, 000
Bank Credited 500, 000 Nov-Service Charge (10, 000)
Erroneous Bank Debit Correction (10, 000) 490, 000 Nov-NSF Check (50, 000) 940, 000
Deposit in Transit, Nov 30 120, 000 Outstanding Checks, Nov.30 380, 000
Problem 3-6
July 31 Receipts Disbursement August 31
Book Balances 1, 200, 000 4, 400, 000 3, 600, 000 2, 000, 000
Note Collected:
July 200, 000 (200, 000)
August 300, 000 300, 000
NSF Check
July (100, 000) (100, 000)
August 50, 000 (50, 000)
Book Errors:
Understated Collection 180, 000 180, 000
Understated Disbursement 540, 000 (540, 000)
Adjusted Book Balance 1, 300, 000 4, 680, 000 4, 090, 000 1, 890, 000
Bank Balances 800, 000 5, 000, 000 3, 940, 000 1, 860, 000
Deposit in Transit
July 31 600, 000 (600, 000)
August 31 480, 000 480, 000
Outstanding Checks:
July 31 (100, 000) (100, 000)
August 31 650, 000 (650, 000)
Bank Errors:
Erroneous Bank Credit (200, 000) (200, 000)
Erroneous Bank Debit (400, 000) 400, 000
Adjusted bank Balances 1, 300, 000 4, 680, 000 4, 090, 000 1, 890, 000
Problem 3-7
Nov. 30 Receipts Disbursement Dec. 31
Book Balances 2, 032, 000 2, 568, 000 1, 440, 000 3, 160, 000
Bank Service Charge:
Nov.30 (2, 000) (2, 000)
Dec.31 4, 000 (4, 000)
Note Collected by Bank:
Nov. 30 (200, 000) 200, 000
Dec. 31 ( 300, 000) (300, 000)
Adjusted Book Balances 1, 830, 000 2, 468, 000 1, 442, 000 2, 856, 000
Bank Balances 1, 890, 000 2, 090, 000 1, 080, 000 2, 900, 000
Deposit in Transit
Nov. 30 80, 000 (80, 000)
Dec. 31 498, 000 498, 000
Outstanding Checks
Nov. 30 (180, 000) (180, 000)
Dec 31 592, 000 (592, 000)
Erroneous Debit:
Nov. 30 40, 000 (40, 000)
Dec. 31 (50, 000) 50, 000
Adjusted bank Balances 1, 830, 000 2, 468, 000 1, 442, 000 2, 856, 000
Problem 5-3
A. Accounts Receivable
Cash 800, 000 Beginning 2, 000, 000 720, 000 Collection
Accounts Receivable 7, 200, 000 Credit Sales 7, 200, 000 5, 940, 000 Collection
Sales 8, 000, 000 80, 000 S/R/A
60, 000 Writeoff
Cash 634, 000 Ending Bal 2, 400, 000
Sales Discount (720, 000 X 5%) 36, 000
Accounts Receivable 720, 000 Allowance for Doubtful Account
Writeoff 60, 000 100, 000 Beginning
Cash 5, 940, 000 10, 000 Recovery
Accounts Receivable 5, 940, 000 50, 000 Unadjusted
60, 000 D/A Expense
Sales Discount 10, 000 120, 000 Required
Allowance for Sales Discount 10, 000 Allowance
(2400, 000 x 5%)
Sales Return and Allowances 80, 000 D/A Expense 70, 000
Accounts Receivable 80, 000 Allowance for D/A 70, 000
Problem 5-4
Problem 5-4 1.Allow. D/A Expense (1-01-19) 28, 000x 1% 28, 000
Non-Current Asset
Other Non-Current Asset
Notes Receivable 300, 000
Less: Unearned I/I 32, 143 267, 857
2019
Jan 1 Loan Receivable 4, 000, 000 Dec 31 Cash 400, 000
Cash 4, 000, 000 Interest Income 400, 000
Requirement #2
Loan Receivable 6, 000, 000
Accrued Interest (6, 000, 000 x 8%) 480, 000
Date Payment Interest Principal PV
Total Carrying Value of Loan 6, 480, 000
12-31-11 5, 022, 101
Less: PV of Cash Flow 5, 022, 101
12-31-12 1, 000, 000 401, 768 598, 232 4, 423, 869
Impairment Loss 1, 457, 899
12-31-13 2, 000, 000 353, 910 1, 646, 090 2, 777, 779
Requirement #3 12-31-14 3, 000, 000 222, 221 2, 777, 779 ------------
2011
Dec. 31 Impairment Loss 1, 457, 899 2013
Accrued Interest Receivable 480, 000 Dec 31 Cash 2, 000, 000
Allow. For Loan Impairment 977, 899 Loan Receivable 2, 000, 000
2012 2014
Dec. 31 Cash 1, 000, 000 Dec 31 Cash 3, 000, 000
Loan Receivable 1, 000, 000 Loan Receivable 3, 000, 000
31 Allow. For Loan Impairment 401, 768 31 Allow. For Loan Impairment 222, 221
Interest Income 401, 768 Interest Income 222, 221
Problem 7-7
Requirement #1
Dec. 31, 2014 360, 000 x 0.77218348 277, 986
Dec. 31, 2015 360, 000 x 0 708425211 255, 033
Dec. 31, 2016 360, 000 x 0.649931386 233,957
Dec. 31, 2017 360, 000 x 0.596267326 2, 599, 726
Total PV Cash Flows 3, 366, 720
Requirement #3
2011 2014
Dec. 31 Cash 360, 000 Dec 31. Cash 360, 000
Interest Income 360, 000 Interest Income 360, 000
2015
31 Impairment Loss 633, 280 Dec 31. Cash 360, 000
Allow. For loan Impairment 633, 280 Interest Income 360, 000
2012 2016
Dec. 31 Allow. For loan Impairment 303, 005 Dec 31. Cash 360, 000
Interest Income 303, 005 Interest Income 360, 000
2013 2017
Dec. 31 Allow. For loan impairment 330, 275 Dec. 31 Cash 4, 360, 000
Interest Income 330, 275 Interest Income 360, 000
Loan Receivable 4, 000, 000
Problem 7-3
2011 2013
Jan. 1 Loan Receivable 3, 000, 000 Dec 31 Cash 240, 000
Cash 3, 000, 000 Interest Income 240, 000
Dec. 31 Cash 240, 000 Date Interest Received Interest Income Amortization PV
Interest Income 240, 000 1-1-11 240, 000 3, 160, 300
12-31-11 240, 000 189, 618 50, 382 3, 109, 918
31 Interest Income 50, 382 12-31-12 240, 000 186, 595 53, 405 3, 056, 513
Direct Origination Cost 50, 382 12-31-13 240, 000 183,487 56, 513 3, 000, 000
2012
Dec. 31 Cash 240, 000 31 Interest Income 53, 405
Interest Income 240, 000 Direct Origination Cost 53, 405
July 1 A/R , assigned 800, 000 Selling Price (6, 000, 000 – 900, 000) 5, 100, 000
A/R 800, 000 Carrying Amount
Accounts Receivable 6, 000, 000
1 Cash 616, 000 Less: Allow. D/A 200, 000 5, 800, 000
Service Charge (800, 000 X 3%) 24, 000 Loss on Factoring (700, 000)
Notes Payable-Bank 640, 000
Cash ( 5, 100, 000 -600, 000) 4, 500, 000
Aug 1 Notes Payable-Bank 413, 000 Receivable from factor (6, 000, 000 x 10%) 600, 000
Interest Expense (640, 000x 1%) 6, 400 Allow. For Doubtful Accounts 200, 000
Accounts Receivable, assigned 420, 000 Loss on Factoring 700, 000
Accounts Receivable 6, 000, 000
Sept 1 Cash 91, 336
Notes Payable 226, 400 6, 000, 000 x 15%= 900, 000
Interest Expense 2, 264
A/R, assigned 320, 000
Problem 8-10 Factoring
Collection 320, 000
Less:Loan Balance 226, 400 June 1 Accounts Receivable 500, 000
Interest 2, 264 228, 664 Sales 500, 000
Remittance from loan 91, 336
3 Cash 340, 000
Loan Balance = 640, 000- 413, 600 Sales Discount (500, 000 x 2%) 10, 000
Interest = 226, 400 x 1% Commission Income (500, 000 x 5%) 25, 000
Receivable from factor (500, 000 x 25%) 125, 000
Accounts Receivable 500, 000