P8-6B Betterdorf Company's bank statement from the National Bank at August 31, 2003, shows the following information: Balance, August 1 August deposits Cheques cleared in August Bank credit memorandum: Collection of note receivable, $5,000 $17,400 72,000 69,660 b'is1s8 plus $90 interest 5,090 Other interest earned Bank debit memorandum: 45 Safety deposit box rent Balance, August 31 25 24,850 A summary of the Cash account in the ledger for August shows the following: Balance, August 1, $16,900; cash receipts $77,000; cash disbursements $73,5Z0. An analysis reveals that the only rec- onciling items on the July 31 bank reconciliation were a deposit in transit for $4,000 and outstand- ing cheques of $4,500. The deposit in transit was the first deposit recorded by the bank in August. In addition, you determine that there were two errors involving company cheques drawn in August: (1) A cheque for $400 to a creditor on account that cleared the bank in August was journalized and posted for $40. (2) A salary cheque for $275 to an employee was recorded by the bank for $572. Instructions (a) Determine the unadjusted Cash balance at August 31. (b) Prepare a bank reconciliation at August 31. (c) Journalize the correcting entries to be made by Betterdorf Company at August 31. Assume the interest on the note has been accrued by the company.
P8-6B Betterdorf Company's bank statement from the National Bank at August 31, 2003, shows the following information: Balance, August 1 August deposits Cheques cleared in August Bank credit memorandum: Collection of note receivable, $5,000 $17,400 72,000 69,660 b'is1s8 plus $90 interest 5,090 Other interest earned Bank debit memorandum: 45 Safety deposit box rent Balance, August 31 25 24,850 A summary of the Cash account in the ledger for August shows the following: Balance, August 1, $16,900; cash receipts $77,000; cash disbursements $73,5Z0. An analysis reveals that the only rec- onciling items on the July 31 bank reconciliation were a deposit in transit for $4,000 and outstand- ing cheques of $4,500. The deposit in transit was the first deposit recorded by the bank in August. In addition, you determine that there were two errors involving company cheques drawn in August: (1) A cheque for $400 to a creditor on account that cleared the bank in August was journalized and posted for $40. (2) A salary cheque for $275 to an employee was recorded by the bank for $572. Instructions (a) Determine the unadjusted Cash balance at August 31. (b) Prepare a bank reconciliation at August 31. (c) Journalize the correcting entries to be made by Betterdorf Company at August 31. Assume the interest on the note has been accrued by the company.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
Transcribed Image Text:P8-6B Betterdorf Company's bank statement from the National Bank at August 31, 2003, shows
the following information:
Balance, August 1
August deposits
Cheques cleared in August
Bank credit memorandum:
Collection of note receivable, $5,000
$17,400
72,000
69,660 b'is1s8
plus $90 interest
5,090
Other interest earned
Bank debit memorandum:
45
Safety deposit box rent
Balance, August 31
25
24,850
A summary of the Cash account in the ledger for August shows the following: Balance, August
1, $16,900; cash receipts $77,000; cash disbursements $73,5Z0. An analysis reveals that the only rec-
onciling items on the July 31 bank reconciliation were a deposit in transit for $4,000 and outstand-
ing cheques of $4,500. The deposit in transit was the first deposit recorded by the bank in August.
In addition, you determine that there were two errors involving company cheques drawn in August:
(1) A cheque for $400 to a creditor on account that cleared the bank in August was journalized and
posted for $40. (2) A salary cheque for $275 to an employee was recorded by the bank for $572.
Instructions
(a) Determine the unadjusted Cash balance at August 31.
(b) Prepare a bank reconciliation at August 31.
(c) Journalize the correcting entries to be made by Betterdorf Company at August 31. Assume
the interest on the note has been accrued by the company.
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