Q1. Enter the following transactions in the two-column journal provided for Marcs Detailing.

You may omit explanations.

Mar. 2
purchased auto cleaning supplies from Sung Suppliers for $400 on account.
4
Collected an account receivable of $360 from a customer, Dee-Lux Limousines.
5
Paid $175 in partial payment of an account payable to Modern Co for equipment purchased in February.
7
Issued capital stock in exchange for $3,500 cash.
9
Purchased office equipment from Wallys Warehouse for $4,200; paid $2,000 cash and issued a note payable due
in 90 days for the balance.
Q2. The accountant for All-Around Consulting prepared the following adjusted trial balance at December 31, 2005, after one
year of operations prepare closing enteries and the post closing trial balance.
Debit
Credit
Cash..................................................................................................
$ 5,400
Accounts Receivable.........................................................................
4,200
Unexpired Insurance.........................................................................
1,800
Office Equipment..............................................................................
18,000
Accumulated Depreciation: Office Equipment..................................
$ 300
Unearned Consulting Fees................................................................
3,000
Capital Stock.....................................................................................
15,000
Retained Earnings, January 1, 2005..................................................
2,400
Dividends..........................................................................................
800
Consulting Fees Earned.....................................................................
20,000
Salaries Expense...............................................................................
6,300
Utilities Expense...............................................................................
1,500
Rent Expense....................................................................................
2,400
Depreciation Expense........................................................................
300
______
$40,700
$40,700
Q3. At the end of the month the unadjusted trial balance of Three Star Company included the following accounts:
Debit
Credit
Sales (75% represent credit sales).........................................................
$1,380,000
Accounts Receivable ...........................................................................
$975,000
Allowance for Doubtful Accounts........................................................
11,750
1
Refer to the above data. If the income statement method of estimating uncollectible accounts expense is
followed, and uncollectible accounts expense is estimated to be 2% of net credit sales, the net realizable value
of Three Stars accounts receivable at the end of the month is?
2

Refer to the above data. If Three Star uses the balance sheet approach in estimating uncollectible accounts, and
aging the accounts receivable indicates the estimated uncollectible portion to be $24,000, the uncollectible
accounts expense for the month is?

Q4. Shown below is a partially completed bank reconciliation for Ruby Transport at August 31, as well as additional data necessary to
answer the questions that follow.
RUBY TRANSPORT
Bank Reconciliation
August 31, 20__
Balance per bank statement
$25,650
Balance per depositors records
$20,631
Additional information
a
Outstanding checks: no. 729, $1,790; no. 747, $350; no. 752, $1,115.
b
Check no. 742 (for repairs) was written for $568 but erroneously recorded in Rubys records as $865.
c
Deposits in transit, $3,220.
d
Note collected by the bank and credited to Rubys account, $6,900.
e
NSF check of C. Craig, one of Rubys customers, $2,178.
f
Bank service charge for August, $35.

Q1.

2004
Mar 2

Supplies

430

Accounts Payable

430

Bought supplies from Sung Supplies.*

Cash

360
Accounts Receivable

360

Collected from Dee-Lux Limousines.*

Accounts Payable

175

Cash

175

Partial
Co.* payment on amount due to Modern
7

Cash

3,500
Capital Stock

3,500

Issued stock.

Office Equipment

4,200

Cash

2,000

Notes Payable

2,200

Purchased office equipment from Wallys

Warehouse; note due in 90 days.*

Q2.

DR
Consulting Fees Earned.................................................
Income Summary

CR

20,000
20,000

Income Summary

10,500

Salaries Expense...........................................

6,300

Utilities Expense..........................................

1,500

Rent Expense................................................

2,400

Depreciation Expense...................................

300

Income Summary...........................................................

9,500

Retained Earnings........................................

9,500

Retained Earnings..........................................................

800

Dividends.....................................................

Q3.

800

At the end of the month the unadjusted trial balance of Three Star Company
included the following accounts:
Debit

Sales (75% represent credit sales)..................

Credit

$1,380,000

Accounts Receivable ...................................... $975,000

Allowance for Doubtful Accounts.....................

Refer to the above data. If the income statement method of

estimating uncollectible accounts expense is followed, and uncollectible
accounts expense is estimated to be 2% of net credit sales, the net
realizable value of Three Stars accounts receivable at the end of the
month is:
a

11,750

$1,359,300. b

$20,700.

$32,450.

$942,550.

Refer to the above data. If Three Star uses the balance sheet
approach in estimating uncollectible accounts, and aging the accounts

receivable indicates the estimated uncollectible portion to be $24,000,

the uncollectible accounts expense for the month is:
a

$24,000.

$12,250.

$35,750.

$11,750.

Q4.
Shown below is a partially completed bank reconciliation for Ruby Transport at
August 31, as well as additional data necessary to answer the questions that
follow.
RUBY TRANSPORT
Bank Reconciliation
August 31, 20__
Balance per bank statement

$25,650

Add:

(1)

Deduct:

(2)

Adjusted cash balance

Balance per depositors records

$20,631

Add:

(3)

Deduct:

(4)

Adjusted cash balance

Additional information
a

Outstanding checks: no. 729, $1,790; no. 747, $350; no. 752, $1,115.

Check no. 742 (for repairs) was written for $568 but erroneously
recorded in Rubys records as $865.

Deposits in transit, $3,220.

Note collected by the bank and credited to Rubys account, $6,900.

NSF check of C. Craig, one of Rubys customers, $2,178.

Bank service charge for August, $35.

In Rubys completed bank reconciliation at August 31, what dollar

amount should be deducted from the balance per bank statement
(indicated by 2 above)?
a

$3,255.

$2,213.

$3,552.

$3,220.

$3,255.

$7,197.

$6,603.

In Rubys completed bank reconciliation at August 31, what dollar

amount should be deducted from the balance per depositors records
(indicated by 4 above)?
a

In Rubys completed bank reconciliation at August 31, what dollar

amount should be added to the balance per depositors records
(indicated by 3 above)?
a

$2,510.

$1,846.

$3,255.

$2,510.

$2,213.

Ruby Transport keeps $500 cash on hand in addition to this checking

account and has no other bank accounts or cash equivalents. What
amount should appear as Cash in Rubys August 31 balance sheet?
a

$26,115.

$20,631.

$25,650.

Some other amount.

The necessary adjustment to Ruby Transports accounting records as of

August 31 includes a net:
a

Increase to Cash of $4,390. c

Increase to Cash of $4,984.

Increase to Cash of $1,916. d

Decrease to Cash of $35