ok balance 1,405,000 Add March 31 deposit 750,000 Collections of note 2,500,000 Interest on note 150,000 3,400,000 Total 4,805,000 Less: Raval Company’s deposit credited to Rizal account 1,100,000 Bank service charge 5,000 1,105,000 Adjusted book balance 3,700,000 Bank balance 5,630,000 Add: Error on check No. 175 45,000 Total 5,675,000 Less: Preauthorized payment for light and water 245,000 NSF check 220,000 Outstanding checks 1,650,000 2,115,000 Adjusted bank balance 3,560,000 Check No. 175 was made for the proper amount of 249,000 in payment of account. However, the check was entered in the cash disbursements journal as 294,000. Rizal Company authorized the bank to automatically pay its light and water bills as submitted directly to the bank. Required: a. Prepare a corrected bank reconciliation. b. Prepare adjusting entries on March 31.
Bad Debts
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.
Book balance 1,405,000
Add March 31 deposit 750,000
Collections of note 2,500,000
Interest on note 150,000 3,400,000
Total 4,805,000
Less: Raval Company’s deposit credited to Rizal
account
1,100,000
Bank service charge 5,000 1,105,000
Adjusted book balance 3,700,000
Bank balance 5,630,000
Add: Error on check No. 175 45,000
Total 5,675,000
Less: Preauthorized payment for light and water 245,000
NSF check 220,000
Outstanding checks 1,650,000 2,115,000
Adjusted bank balance 3,560,000
Check No. 175 was made for the proper amount of 249,000 in payment of account.
However, the check was entered in the cash disbursements journal as 294,000.
Rizal Company authorized the bank to automatically pay its light and water bills as
submitted directly to the bank.
Required:
a. Prepare a corrected bank reconciliation.
b. Prepare
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