Problem 2-1

a. Book balance 65,000

Proceeds of a note collected by bank 30,000
Bank service charge (2,000)
Adjusted balance 93,000

Bank balance 108,000

Deposit in transit 80,000
Outstanding checks:
Check No. 102 (15,000)
Check No. 105 (30,000)
Check No. 107 (50,000) (95,000)
Adjusted balance 93,000

b. Adjusting Entries:
Cash in bank 30,000
Accounts Receivable 30,000
Bank service charge 2,000
Cash in bank 2,000

Problem 2-2

a. Book balance 110,000

Credit memo 45,000
Debit memos:
Check No. 776 (27,000)
NSF check (10,000)
Bank service charge (5,000) (42,000)
Adjusted balance 113,000

Bank balance 135,000

Deposit in transit 60,000
Outstanding checks:
Check No. 775 (30,000)
Check No. 777 (40,000)
Check No. 770 (20,000) (90,000)
Error – Check No. 1042 8,000
Adjusted balance 113,000

b. Adjusting Entries
Cash in bank 45,000
Collection fee 5,000
Notes Receivable 50,000

Accounts payable 27,000

Cash in bank 27,000
Accounts Receivable 10,000
Cash in bank 10,000
Bank service charge 5,000
Cash in bank 5,000
Problem 2-3

a. Bank balance 3,265,000

Deposits in transit:
Feb. 9 800,000
Feb. 10 200,000
Feb. 28 450,000 1,450,000
Outstanding checks:
Check No. 116 (60,000)
Check No. 122 (180,000)
Check No. 124 (120,000)
Check No. 125 (250,000) (610,000)
Adjusted balance 4,105,000

Book balance (Squeeze) 3,640,000

Note collected by bank 270,000
Service charge (5,000)
Unrecorded deposit (Feb. 10) 1,000,000
Unrecorded check no. 119 (800,000)
Adjusted balance 4,105,000

b. Adjusting Entries
Cash 270,000
Collection fee 10,000
Notes Receivable 250,000
Interest income 30,000
Bank service charge 5,000
Cash in bank 5,000