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ACCO 3150 Mdulo 1 Tarea: 1.1

E7-1 (Determining Cash Balance) The controller for Weinstein Co. is attempting to
determine the amount of cash and cash equivalents to be reported on its December 31,
2010, balance sheet. The following information is provided.
Commercial savings account of $600,000 and a commercial checking account balance of
$800,000 are held at First National Bank of Olathe.
Money market fund account held at Volonte Co. (a mutual fund organization) permits
Weinstein to write checks on this balance, $5,000,000.
Travel advances of $180,000 for executive travel for the first quarter of next year
(employee to reimburse through salary reduction).
A separate cash fund in the amount of $1,500,000 is restricted for the retirement of long-
term debt.
Petty cash fund of $1,000.
An I.O.U. from Marianne Koch, a company customer, in the amount of $150,000.
A bank overdraft of $110,000 has occurred at one of the banks the company uses to
deposit its cash receipts. At the present time, the company has no deposits at this bank.
The company has two certificates of deposit, each totaling $500,000. These CDs have a
maturity of 120 days.
Weinstein has received a check that is dated January 12, 2011, in the amount of
$125,000.
Weinstein has agreed to maintain a cash balance of $500,000 at all times at First National
Bank of Olathe to ensure future credit availability.
Weinstein has purchased $2,100,000 of commercial paper of Sergio Leone Co. which is
due in 60 days.
Currency and coin on hand amounted to $7,700.
Instructions
(a) Compute the amount of cash to be reported on Weinstein Co.s balance sheet at December
31, 2010.
(b) Indicate the proper reporting for items that are not reported as cash on the December 31,
2010, balance sheet.
Los avances de viajes deben reportarse como " empleado por cobrar" con un monto de $180,000.
El efectivo es restringido por un monto de $ 1.5 millones para el retiro de dbito a largo plazo
debe y ser reportado como activo no corriente como "efectivo restringido para el retiro de la
deuda a largo plazo. "
Un pagar de Marianne Koch debe ser reportado como un crdito por la suma de $ 150,000.
El sobregiro bancario de $ 110,000 debe ser reportado como pasivo corriente .
Certificados de depsitos de $ 500,000 cada uno deben ser clasificados como inversiones
temporales .
Cheque con fecha adelantada de $ 125.000 debe ser reportado como cuentas por cobrar .
El requisito de saldo de compensacin no afecta el resto en efectivo.
Cash Includes the Following:
Cash Includes the following:
Savings account First National Bank of Olathe $600,000

Checking account First National Bank of Olathe

$800,000
Money market fundVolonte $5,000,000
Petty cash $1,000
Commercial Paper $2,100,000
Currency and coin on hand $7,700
Cash reported on December 31, 2010, balance sheet $8,508,700

Other Items classified as follows:

E7-5 (Record Sales Gross and Net) On June 3, Bolton Company sold to Arquette Company
merchandise having a sale price of $2,000 with terms of 2/10, n/60, f.o.b. shipping point. An
invoice totaling $90, terms n/30, was received by Arquette on June 8 from John Booth
Transport Service for the freight cost. On June 12, the company received a check for the
balance due from Arquette Company.
Instructions:
(a) Prepare journal entries on the Bolton Company books to record all the events noted above
under each of the following bases. (1) Sales and receivables are entered at gross selling price. (2)
Sales and receivables are entered at net of cash discounts.
(b) Prepare the journal entry under basis 2, assuming that Arquette Company did not remit
payment until July 29.

General Journal
Description Debit Credit
a) June 3 Accounts Receivable $2,000
Sales $2,000
June 12 Cash $1,960
Sales Discounts $40
Accounts Receivable $2,000
June 12 Cash $1,960
Accounts Receivable $1,960
b) July 29 Cash $2,000
Accounts Receivable $1,960
Sales Discounts Forfeited $40

E7-9 (Computing Bad Debts and Preparing Journal Entries) The trial balance before
adjustment of Estefan Inc. shows the following balances.

Instructions Give the entry for estimated bad debts assuming that the allowance is to provide for
doubtful accounts on the basis of (a) 4% of gross accounts receivable and (b) 1% of net sales.

General Journal
Description Debit Credit
Bad Debt Expense $4,950
Allowance for Doubtful Accounts $4,950
E7-12 (Journalizing Various Receivable Transactions) Presented below is information
related to Sanford Corp.
July 1 Sanford Corp. sold to Legler Co. merchandise having a sales price of $10,000 with terms
2/10, net/60. Sanford records its sales and receivables net.
5 Accounts receivable of $12,000 (gross) are factored with Rothchild Credit Corp. without
recourse at a financing charge of 9%. Cash is received for the proceeds; collections are
handled by the finance company. (These accounts were all past the discount period.)
9 Specific accounts receivable of $9,000 (gross) are pledged to Rather Credit Corp. as
security for a loan of $6,000 at a finance charge of 6% of the amount of the loan. The
finance company will make the collections. (All the accounts receivable are past the
discount period.)
Dec. 29 Legler Co. notifies Sanford that it is bankrupt and will pay only 10% of its account. Give
the entry to write off the uncollectible balance using the allowance method. (Note: First
record the increase in the receivable on July 11 when the discount period passed.)

Instructions Prepare all necessary entries in general journal form for Sanford Corp.

General Journal
Description Debit Credit
July 1 Accounts ReceivableLegler Co. $9,800
Sales $9,800
July 5 Cash $10,920
Loss on Sale of Receivables $1,080
Accounts Receivable $11,760
Sales Discount $240
July 9 Accounts Receivable $180
Sales Discounts Forfeited $180
Cash $5,640
Finance Charge $360
Notes payables $6,000
July 11 Accounts ReceivableLegler Co. $200
 Sales Discounts Forfeited $200
Dec. 29 Allowance for Doubtful Accounts $9,000
Accounts ReceivableLegler Co. $9,000