SOLUTION PROBLEM 1

1 Currency and coins (given) C. 152.00

2 Petty cash accounted (152 + 400 + 340 + 2043.50) 2935.5

Accountability - per ledger 3,000
Petty cash shortage D. 64.50

3 December deposits per bank 82,800.00

Note collected by bank in December 10150
Total receipts in Dec. C. 92950

4 December checks per bank 92,200

December service charge 150
Total bank disbursements in Dec. A. 92350

5 December checks per books 94,100

November service charge recorded in December 100
Total book disbursement in Dec. A. 94,200

6 November deposits - per books 73,600

November deposits - per bank 71,100
Deposit in transit, Nov. 30 B. 2500

7 Deposits in transit, Nov 30 2,500

December deposits - collections 82,200
Total 84,700
December deposits per bank -82,800
Deposits in transit, Dec 31 C. 1,900

8 November checks per books 62,900

November checks per bank 61,300
Outstanding checks, Nov 30 D. 1,600

9 Outstanding checks, Nov. 30 1,600

Dec. checks per books 94,100
Total 95,700
Dec. checks per bank -92,200
Outstanding checks, Dec 31 A. 3,500

10 Correct cash in bank balance at November 30 D. 50600

11 Correct cash in bank balance at Dec 31 B. 48,700
12 Correct book receipts in December A. 92,350
13 Correct bank disbursements in December C. 94,250
14 A. Bad debts expense 90,000
Allowance for bad debts 90,000
15 D. No entry

16 Allowance for bad debts - per books 108,500

2003 bad debts provision (6,000,000 x 1.5%) 90,000
Allowance for bad debts, Dec 31, 2003 B. 198,500

SOLUTION PROBLEM 2

17 Accounts receivable Dec. 31, 2002 900,000

Sales for 2003 75,000,000
Recovery of accounts written off 15,000
Total 8,415,000
Collections from customers 6,540,000
Accounts written off 75,000
Accounts settled by issuance of note 300,000
Accounts receivable Dec. 31, 2003 A. 1500000

18 Allowance for doubtful accounts Dec. 31, 2002 45,000

Recovery of account written off 15,000
Total 60,000
Accounts written off -75,000
Allowance for doubtful accounts Dec. 31, 2003 before adjustment A. -15,000 (debit)

19 On past due accounts (P450,000 x 0.20) 90,000

On current accounts (1,500,000 -450,000) x 0.05 52,500
Required allowance D. 142,500

20 Required allowance 142,500

Debit balance of allowance before adjustment 15,000
Increase in allowance B. 157,500

21 D. Doubtful accounts expense 157,500

Allowance for doubtful accounts 157,500