SOLUTIONS AND ANSWERS:

1 Balance per bank, November 30, 2006 150,000

add: total deposits 110,000
total 260,000
less: total charges (96,000)
balance per bank, December 31, 2006 164,000

1. ANSWER: C

2 total deposits per bank statement 110,000

Less: Deposit in transit (24,000)
December receipts cleared thru the bank 86,000
Add: Deposit intransit, December 31 38,000
December receipts per book 124,000

2. ANSWER: A

3 Total charges per bank statement 96,000

Less: Outstanding checks, 11/30 28,000
Bank credit error 10,000
December NSF check 8,000
December bank service charge 400 (46,400)
December disbursement cleared thru the bank 49,600
Add: Outstanding checks, 12/31 30,000
December disbursements per book 79,600

3. ANSWER: B

4 Balance per book, 11/30 136,000

add: December receipts per book 124,000
total 260,000
Less: December disbursements 79,600
balance per book, 12/31 180,400

4. ANSWER: C

5 Balance per bank statement, 12/31 164,000

Deposit in transit 38,000
Outstanding checks (30,000)
Adjusted bank balance, 12/31 172,000

Balance per book, 12/31 180,400

NSF checks (8,000)
Bank service charge (400)
Adjusted book balance, 12/31 172,000

5. ANSWER: C
 SOLUTIONS AND ANSWER:

Allowance for bad debts, January 2007 146,000

Uncollectible accouts written-off (22,000)
Bad debts expense 300,220 work back
Allowance for bad debts, December 2006 424,220

NET SALES COMPUTATION:

Bad debts expense 300,220
Divide by: 2%
Net sales 15,011,000

ANSWER: A. 15,011,000
proof
146,000
(22,000)
300,220
424,220