bank reconciliation e. Interest on cash balance- affects book side and represents an addition in a bank reconciliation f. Credit memos- affects the book side and represents an addition in a bank reconciliation g. Bank service charges- affects the book side and represents a subtraction in a bank reconciliation 2. Which of the items in part 1 require an adjusting journal entry? *The items in part 1 that require an adjusting journal entry would be interest on cash balance, NSF checks and bank service
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of the supplies and pays for these purchases. He also receives the checks and completes the monthly bank reconciliation. The accountant is so busy that the company handles petty cash a bit differently. All employees have access to the petty cash in a desk drawer and are asked to only place a note if they use any of the cash. The accountant has recently started using pre-numbered invoices and wants to buy an indelible ink machine to print their checks. The President is waiting to hear from you if
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Economy Shipping Economy Shipping Company (Abridged) Question 1. What are the relevant cash flows under each of the two alternatives? And in what years do they occur? Alternative 1: Rehabilitation of the Conway We decided to divide this alternative in two parts. Part A is Rehabilitation without parts and Part B is Rehabilitation with parts. Facts/Assumptions • Conway’s additional useful life of 20 years. • Book value of Conway: $39,500 • Market value of Conway: $25,000
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have the flexibility (options) to respond to changing economic conditions, they can modify or halt the operation of the investment so as to maximize the value created by the investment. >> END Solution ST.3 Tools for Analyzing the Risk of Project Cash Flows 13–1. (Related to Checkpoint 13.1 on page 420) (Calculating expected revenues) The owner of the Crusik Distribution Company is evaluating the expected annual sales for a new line of facial care products and estimates that there is a 50% chance
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Lorman Lumber Company Case Study 2 Lorman Lumber Company is a publicly traded company located in rural Oregon in the town of Yamica on the Mohegan River. The Lorman Lumber Company is a producer of lumber products including plywood, wood studs and wood chips. Chemicals used in the production process include petroleum based creosote and pentachlorophenol (PCP) solutions that are applied to the wood to prevent moisture loss. The sawmill plant is somewhat outdated but is reasonably efficient and
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of the supplies and pays for these purchases. He also receives the checks and completes the monthly bank reconciliation. The accountant is so busy that the company handles petty cash a bit differently. All employees have access to the petty cash in a desk drawer and are asked to only place a note if they use any of the cash. The accountant has recently started using pre-numbered invoices and wants to buy an indelible ink machine to print their checks. The President is waiting to hear from you if
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Cash Flow and Payment Terms Cash flow is the lifeblood of any organisation. Companies in the private sector generally focus on increasing profits, but it is inadequate cash flows that can cause serious financial difficulties. With increased fuel and food prices and predictions of a US recession, never has there been a more important time to track cash flow. As value protectors and risk managers, this is a key role for the procurement function. Cash flow is a major concern to SMEs and often threatens
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forecasted Income Statement and Cash Flow Analysis to find out if the company will have the required cash flows to repay their loan and interest on time. It is important, however, to first examine why HMTC was unable to repay its initial loan. Hampton Machine Tool Company was unable to repay its loan on time due to several factors. One of such factors is the fact that the stock repurchase, for which the loan was initially requested, was a major cash disbursement of $3 million. In the
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Juan’s sales, 30 percent are for cash and the remaining 70 percent are on credit. Of credit sales, 40 percent are paid in the month after sale and 60 percent are paid in the second month after the sale. Materials cost 20 percent of sales and are paid for in cash. Labor expense is 50 percent of sales and is also paid in the month of sales. Selling and administrative expense is 5 percent of sales and is also paid in the month of sales. Overhead expense is $12,000 in cash per month; depreciation expense
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lockbox system | |b) Prenumbered remittance advices | |c) Monthly bank reconciliations | |d) Daily deposit of cash receipts | Term |b) Stamped "paid" by the check signer | |To provide assurance that each voucher is submitted and paid only once, the | |auditors most likely
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