### bank reconciliation and journal entries

Problem 1

Preparing a bank reconciliation and journal entries

The December cash records of Dunlap Insurance follow:

Cash Receipts Cash Payments

Date Cash Debits Check No. Cash Credit

Dec. 4 \$4,170 1416 \$ 860

9 510 1417 130

14 5 30 1418 650

17 2,180 1419 1,490

31 1,850 1420 1,440

1421 900

1422 630

Dunlap’s Cash account shows a balance of \$16,740 at December 31. On December 31, Dunlap Insurance received the following bank statement:

Bank Statement for December

Beginning Balance \$13,600

Deposits and other Credits

Dec. 1 EFT \$ 300

5 4,170

10 510

15 530

18 2,180

22 BC 1,400 9,090

Checks and other Debits

Dec 8 NSF \$1,000

Dec 11 (Check 1416) 860

Dec 19 EFT 700

Dec 22 (Check 1417) 130

Dec 29 (Check 1418) 650

Dec 31 (Check 1419) 1,940

Dec 31 SC 60 (5,340 )

Ending balance \$ 17,350

Explanations: BC = bank collection; EFT = electronic funds transfer;

NSF = nonsufficient funds checks; SC = service charge

The EFT credit was a receipt of rent. The EFT debit was an insurance payment.
The NSF check was received from a customer
The \$1400 bank collection was a note receivable.
The correct amount of check 1419 for rent is \$1940. Dunlap’s controller mistakenly recorded the check for \$1490

Assignment
Prepare the bank reconciliation of Dunlap Insurance at December 31, 2012
Journalize any required entries from the bank reconciliation

Problem 2

Accounting for uncollectible accounts using the allowance and direct write-off methods, and reporting receivables on the balance sheet

On August 31, 2012, Daisy Floral Supply had a \$155,000 debit balance in Accounts receivable and a \$6,200 credit balance in Allowance for uncollectible accounts.

* sales on account, \$590,000.

* collections on account \$62,700

* write-offs of uncollectible receivables, \$7,000

Assignment
Journalize all September entries using the allowance method. Uncollectible account expense was estimated at 3% of credit sales. Show all September activities in Accounts receivable, Allowance for uncollectible accounts, and Uncollectible account expense (post to these T- accounts)
Using the same facts, Journalize the entries using the direct write-off method. Post to Accounts receivable and Uncollectible account expense and show their balances at September 30, 2012.
What amount of uncollectible account expense would Daisy report on its September income statement under each of the two method? Which amount better matches expense with revenue? Give your reason
What amount of net accounts receivable would Daisy report on its September 30, 2012 balance sheet under each two methods? Which amount is more realistic? Give your reason.

Problem 3

Accounting for uncollectible accounts using allowance method, and reporting receivables on the balance sheet

At September 30, 2012, the accounts of Mountain Terrace Medical Center (MTMC) include the following:

Assignment

1. Journalize the transactions
2. Open the allowance for uncollectible accounts T-account, and post entries affecting the account. Keep a running Balance
3. Show how MTMC should report net accounts receivable on its December 31, 2012 balance sheet. Use the three line reporting forma