Financial Accounting – Project II.
The bank portion of the bank reconciliation for the Fixar Company at January 31,2018 is as follows:
FIXAR COMPANY
Bank Reconciliation
January 31, 2018
Cash balance per bank
$13,581.90
Add: Deposits in transit
1,432.80
15,014.70
Less:
Outstanding checks
Check Number
Check Amount
3351
$1,089.20
3370
930.40
3371
844.50
3372
734.90
3374
1,050.00
3375
1,396.60
6,045.60
Adjusted cash balance per bank
$8,969.10
The adjusted cash balance per bank agreed with the cash balance per books at January 31st.
The February bank statement showed the following checks and deposits.
Bank Statement
Checks
Deposit
Date
Number
Amount
DateAmount
2-1
3370
$ 930.40
2-1
$1,432.80
2-2
3371
844.50
2-4
1,451.50
2-4
3374
1,050.00
2-8
890.10
2-6
3376
2,830.00
2-13
2,575.00
2-7
3377
600.00
2-18
1,472.70
2-10
3379
1,740.00
2-20
2,836.00
2-15
3380
1,330.00
2-25
2,567.30
2-18
3381
695.40
2-27
2,350.00
. 2-27
3383
425.75
2-28
1,186.00
2-28
3386
750.00
Total
$16,761.40
2-28
3389
1,210.45
2-28
3392
542.00
Total
$12,948.50
The cash records per books for February show the following information:
Cash Payments JournalCash Receipts Journal
DateNumberAmountDateNumberAmountDateAmount
2-1
3376
$2,830.00
2-20
3384
730.75
2-3 $1,451.50
2-2
3377
600.00
2-22
3385
882.30
2-7
890.10
2-2
3378
538.20
2-23
3386
750.00
2-12
2,575.00
2-4
3379
1,470.00
2-24
3387
526.70
2-17
1,472.70
2-8
3380
1,330.00
2-25
3388
750.00
2-19
2,863.00
2-10
3381
695.40
2-26
3389
1,210.45
2-24
2,567.30
2-15
3382
547.00
2-27
3392
542.00
2-26
2,350.00
2-18
3383
425.75
Total
$13,828.55
2-27
1,186.00
2-28
2,456.00
Total $17,811.60
The bank statement contained two bank memoranda:
1. A credit of $1,895.00 for the collection of a $1,800 note for Fixar Company plus interest of $115 and less a collection fee of $20.
Fixar Company accrued interest to the maturity of the note.
2. A debit for the printing of additional company checks, $75.00.
At February 28 the cash balance per books was $11,118.80 and the cash balance per the bank statement was $17,381.45.
The bank did not make any errors but two errors were made by Fixar Company.
Instructions:
(a) Prepare the bank reconciliation at February 28, 2018
(b) Prepare the adjusting entries based on the reconciliation. (Note. The correction of any errors pertaining to recording checks should be made to Accounts Payable. The correction of any errors relating to recording cash receipts should be made to Accounts Receivable.)
Project I
The trial balance of the Wall Fashion Center, Inc. contained the following accou ...
Financial Accounting – Project II.The bank portion of the bank.docx
1. Financial Accounting – Project II.
The bank portion of the bank reconciliation for the Fixar
Company at January 31,2018 is as follows:
FIXAR COMPANY
Bank Reconciliation
January 31, 2018
Cash balance per bank
$13,581.90
Add: Deposits in transit
1,432.80
3. The adjusted cash balance per bank agreed with the cash
balance per books at January 31st.
The February bank statement showed the following checks and
deposits.
Bank Statement
Checks
Deposit
Date
Number
Amount
DateAmount
2-1
3370
$ 930.40
2-1
$1,432.80
9. 2-27
1,186.00
2-28
2,456.00
Total $17,811.60
The bank statement contained two bank memoranda:
1. A credit of $1,895.00 for the collection of a $1,800 note for
Fixar Company plus interest of $115 and less a collection fee of
$20.
Fixar Company accrued interest to the maturity of the note.
2. A debit for the printing of additional company checks,
$75.00.
At February 28 the cash balance per books was $11,118.80 and
the cash balance per the bank statement was $17,381.45.
The bank did not make any errors but two errors were made by
Fixar Company.
10. Instructions:
(a) Prepare the bank reconciliation at February 28, 2018
(b) Prepare the adjusting entries based on the reconciliation.
(Note. The correction of any errors pertaining to recording
checks should be made to Accounts Payable. The correction of
any errors relating to recording cash receipts should be made to
Accounts Receivable.)
Project I
The trial balance of the Wall Fashion Center, Inc. contained the
following accounts at December 31, 2017 the end of the
company’s calendar year.
WALL FASHION CENTER, INC.
Trial Balance
31-Dec-17
Debit
Credit
Cash
$ 16,700
Accounts Receivable
33,700
Merchandise Inventory (Beginning)
13. 26,400
Utilities Expense
17,000
Repair Expense
9,100
Delivery Expense
16,700
Rent Expense
24,000
$ 990,700
$ 990,700
Adjustment data:
1. Store supplies on hand totaled $3,500.
2. Depreciation is $9,000 on the store equipment and $7,000 on
the delivery equipment.
3. Interest of $11,000 is accrued on notes payable at December
31.
Other data:
1. Merchandise inventory on hand at December 31, 2017 is
14. $45,000.
2. Salaries expense is 70% selling and 30% administrative.
3. Rent expense and utilities expense are 80% selling and 20%
administrative.
4. $30,000 of notes payable are due for payment next year.
5. Repair expense is 100% administrative.
6. The beginning balance of accounts receivable is $31,250.
7. The amount of total assets at the beginning of the year is
$199,700.
Instructions
1) Journalize the adjusting entries.
2) Prepare a multiple-step income statement and a retained
earnings statement for the year and a classified balance sheet as
of December 31, 2017.
3) Journalize the closing entries.
4) Prepare a post-closing trial balance.
5) Prepare the following ratios and show all support for your
computations:
a) Current Ratio
b) Quick Ratio
c) Working Capital
15. d) Accounts Receivable Turnover
e) Average Collection Period
f) Inventory Turnover
g) Days in Inventory
h) Debt to Total Assets Ratio
i) Gross Profit Ratio
j) Profit Margin Ratio
k) Return on Assets Ratio
l) Asset Turnover Ratio
6) Based on the ratios computed in 5) above, answer the
following questions and use the financial statement ratios to
support your answers where appropriate:
· Do you feel that the company is able to meet its current and
long term obligations as they become due?
· Comment on the profitability of the company with respect to
the various profitability ratios that you computed.
· Would you lend money to this company for the long term?
· Comment on the ability of the company to collect its
receivables and mange inventory.
2014
2015