E8-11 Prepare bank reconciliation and adjusting entries

The following information pertains to Crane Video Company.

1 Cash balance per bank, July 31, $7,263.
2 July bank service charge not recorded by the depositor $28.
3 Cash balance per books, July 31, $7,284.
4 Deposits in transit, July 31, $1,300.
5 Bank collected $700 note for Crane in July, plus interest $36, less fee $20. The
collection has not been recorded by Crane, and no interest has been accrued.
6 Outstanding checks, July 31, $591.

Instructions
(a) Prepare a bank reconciliation at July 31.
(b) Journalize the adjusting entries at July 31 on the books of Crane Video Company.

Solution:
epare a bank reconciliation on july 31
MINER VIDEO COMPANY
Bank Reconciliation
Jul-13

Cash balance per bank statement $7,263

Add: Deposits in transit $1,300
$8,563
Less: Outstanding checks $591
Adjusted cash balance per bank $7,972

Cash balance per books $7,284

Add: Collection of N/R($700 plus
accured interest $36 less collection fee
$20) $716

Less: Bank Service charge $28

Adjusted cash balance per books -$28

b. Journalize the adjusting entries at july 31 on the books of miner video company
Date Description Debit Credit
Jul-31 Cash $716
Miscellaneous Expense $20
Notes Receivable $700
Interest Revenue $36
Jul-31 Miscellaneous Expense $28
Cash $28
Total $764 $764
fee $20. The
en accrued.

Video Company.
P9-3A Journalize entries to record transactions related to bad debts
Presented below is an aging schedule for Halleran Company.

Number of Days Past Due

Customer Total Not yet Due 1-Jan 31-60 61-90

Anders $ 22.000 $ 10.000 $ 12.000
Blake 40,000 $ 40.000
Coulson 57,000 16,000 6,000 35,000
Deleon 34,000
Others 132,000 96,000 16,000 14,000
$ 285,000 $ 152.000 $ 32,000 $ 26.000 $ 35.000

Estimated
Percentage
Uncollectible 3% 6% 13% 25%

Total Estimated
Bad Debts $ 38,610 $ 4,560 $ 1,920 $ 3,380 $ 8,750

At December 31, 2017, the unadjusted balance in Allowance for Doutful Accounts is a credit of $12,000.
Instructions:
(a) Journalize and post the adjusting entry for bad debts at December 31, 2017.
(b) Journalize and post the allowance account the following events and transactions in the year 2018.
(1) On March 31, a $1,000 customer balance originating in 2017 is judged uncollectible.
(2) On May 31, a check for $1,000 is received from the customer whose account was written off as u
on March 31.
( c) Journalize the adjusting entry for bad debts on December 31, 2018, assuming that the unadjusted bal
the Allowance for Doubtful Accounts is a debit of $800 and the aging schedule indicates that total estim
debts will be $31,600.
Solution:
(a) Journalize and post the adjusting entry for bad debts at December 31, 2017.
(Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Helleran Company
Adjusting Entry

Date Account Titles Debit Credit

Bad Debts Expense(38.610-12.000) $26,610

31 December 2017 Allowance for doubtful accounts $26,610

Helleran Company
 Ledger Accounts

Date Explanation Debit Credit

31 December 2017 Adjusting Entry $26,610

Alowance For Doubtful Accounts

Date Explanation Debit Credit

31 December 2017 Adjusting Entry $26,610

b.
1
Alowance For Doubtful Accounts

Date Explanation Debit Credit

Allowance for doubtful accounts $1,000
31 March 2017
Accounts Receivable $1,000

2
Hellen Company
Jurnal Entry
Date Explanation Debit Credit
Accounts Receivable $1,000
Allowance for doubtful accounts $1,000
31 March 2018
cash $1,000
Accounts Receivable $1,000

Allowance for Doubtful Accounts

Date Explanation Debit Credit

31 December 2017 Accounts Receivable $1,000
31 December 2017 Allowance for doubtful accounts $1,000
31 March 2018 cash $1,000
31 March 2018 Accounts Receivable $1,000

c
Helleran Company
Adjusting Entry

Date Account Titles Debit Credit

Bad Debts Expense(28.600+800) $29,400
31 December 2018 Allowance for doubtful accounts $29,400
 Past Due

Over 90

34,000
6,000
$ 40.000

50%

$ 20,000
$ 18,610
unts is a credit of $12,000.

actions in the year 2018.

ed uncollectible.
account was written off as uncollectible

ming that the unadjusted balance in

dule indicates that total estimated bad

dent manually.)
Balance
$26,610

Balance
$26,610