On October 31 George Flaum, the accountant for Kits & Pups Grooming, received the bank statement dated October 30. After comparing the company’s checkbook with the bank statement, George found the following: 1. The checkbook balance on October 31 is $960. 2. The ending bank statement balance is$1,380. 3. The bank statement shows a service charge of $10. 4. A deposit of$405 was made on October 30, but does not appear on the bank statement. 5. Check 768 for $529 and Check 772 for$306 are outstanding. In your working papers: 1. Record the bank service charge in the checkbook. 2. Reconcile the bank statement. 3. Journalize the bank service charge in the general journal, page 4. 4. Post the bank service charge journal entry to the appropriate general ledger accounts.

On October 4 the owner of Wilder ness Rentals deposited the following in the business checking account at First National Bank. The beginning balance in the account is $3,306.54 before these transactions. Cash: Currency,$374.00; Coins, $7.42 Checks: Bob Warner, drawn on Consumers Bank, ABA No. 63-706;$64.98 Joan Walkman, drawn on Mountain Bank, ABA No. 63-699; $349.81 Ernesto Garcia, drawn on Progressive Savings and Loan, ABA No. 63-710;$29.44. In your working papers: 1. Place a restrictive endorsement on each check. Use “Wilderness Rentals.” 2. Fill out a deposit slip. Use the ABA number to identify each check. 3. Record the deposit in the checkbook on Check Stub 651.

On August 14 Loretta Harper, owner of Peabody Cards and Gifts, deposited the following items in the checking account of the business. Cash: $784.29 Checks: Charles Ling, drawn on American Bank of Commerce, ABA No. 32-7091;$39.44 Keith Lopez, drawn on People’s Bank, ABA No. 84-268; $22.95 Marjorie Luke, drawn on Horizon Federal Savings and Loan, ABA No. 84-6249;$52.95 Mable Parker, drawn on Security National Bank, ABA No. 84-2242; $67.45 On August 15 Peabody received the July bill from Northeast Telephone for$214.80. On August 17 Peabody received an advertising bill from the Bayside News for $275.00. Using the forms provided in your working papers: 1. Complete a deposit slip. 2. Record the deposit on the check stub for Check 41. 3. Record the information for paying the telephone bill on Check Stub 41 and complete the check stub. Use August 16 as the date. 4. Prepare Check 41 to pay the telephone bill and sign your name as drawer. 5. Prepare the check stub and Check 42 to pay the bill for advertising. Use August 17 as the date and sign your name as drawer.

Johnson Corporation’s bank statement for October reports an ending balance of $22,381, whereas Johnson’s cash account shows a balance of$22,025 on October 31. The following additional information is available:

a. A $855 deposit made on October 31 was not recorded by the bank until November.

b. At the end of October, outstanding checks total$1,222.

c. The bank statement shows bank service charges of $125 not yet recorded by the company.

d. The company erroneously recorded as$973 a check that it had actually written for $379. It was correctly processed by the bank.

e. A$480 check from a customer, deposited by the company on October 29, was returned with the bank statement for lack of funds.

Required:

What amount will be reported as cash on the October 31 balance sheet?

Bank reconciliation adjustment a. Show the reconciling items in a horizontal model or write the adjusting journal entry (or entries) that should be prepared to reflect the reconciling items of the earlier exercise.

b. What is the amount of cash to be included in the August 31 balance sheet for the bank account reconciled in the previous exercise?

Explain the differences between cash, checks, and credit card sales. Write a persuasive paragraph describing the advantages of using a debit card over a credit card.

On October 20 Job Connect received its bank statement dated October 18. 1. The checkbook balance on October 20 is $880.84. 2. The ending bank statement balance is$344.58. 3. A $14.00 service charge appears on the bank statement. 4. The following checks are outstanding: Check 864$ 88.41 Check 869 69.34 Check 871 $129.88 Check 873 14.25 5. A$68.42 check from Tom McCrary deposited on October 13 was returned by the bank for insufficient funds. The bank charged Job Connect’s account $7.00 for the NSF check. No journal entry was made for the NSF check. 6. A$938.72 deposit on October 19 is not on the bank statement. 7. A check for $200.00 to Fontenot Inc. was lost in the mail and has not been deposited. A stop payment order, which cost$10.00, was issued on October 15. No new check was issued. Reconcile the bank statement using the account form in your working papers.

Hot Suds Car Wash uses the following accounts:

$$\begin{matrix} \text{Assets} & \text{$=$} & \text{Liabilities} & \text{$+$} & \text{Owner’s Equity}\\ \hline \text{Cash in Bank} & \text{ } & \text{Accounts Payable} & \text{ } & \text{Regina Delgado,}\\ \text{Accounts Receivable} & \text{ } & \text{ } & \text{ } & \text{Capital}\\ \text{Office Equipment} & \text{ } & \text{ } & \text{ } & \text{ }\\ \text{Office Furniture} & \text{ } & \text{ } & \text{ } & \text{ }\\ \text{Car Wash Equipment} & \text{ } & \text{ } & \text{ } & \text{ }\\ \end{matrix}$$

Use a form similar to the one that follows. For each transaction: 1. Identify the accounts affected. 2. Classify the accounts. 3. Determine the amount of the increase (+) or decrease (-) for each account affected. The first transaction is completed as an example.

$$\begin{matrix} \text{Trans.} & \text{Accounts } & \text{Classification} & \text{Amount of Increase (+)}\\ \text{ } & \text{Affected} & \text{ } & \text{or Decrease (-)}\\ \hline \text{1.} & \text{Cash in Bank} & \text{Asset} & \text{$+\$25,000$}\\ \text{ } & \text{Regina} & \text{ } & \text{ }\\ \text{ } & \text{Delgado,} & \text{ } & \text{ }\\ \text{ } & \text{Capital} & \text{Owner’s Equity} & \text{$+\$25,000$}\\ \end{matrix}$$

$$\begin{array}{rl} \text{Date} & \text{Transactions}\\ \hline \text{Jan. 1} & \text{1.Regina Delgado, the owner, invested $\$25,000$ cash in the business.}\\ \text{4} & \text{2.Bought car wash equipment with cash for $\$12,000$.}\\ \text{5} & \text{3.Purchased, on account, $\$2,500$ of office equipment.}\\ \text{10} & \text{4.Wrote a check for the monthly rent, $\$800$.}\\ \text{12} & \text{5.Received cash for services performed, $\$1,000$.}\\ \text{15} & \text{6. The owner withdrew $\$600$ cash from the business for personal use.}\\ \text{20} & \text{7. Purchased a desk for $\$1,000$, paying $\$200$ cash and agreeing to pay the balance of $\$800$ in 30 days.}\\ \text{25} & \text{8. Provided services worth $\$600$ on account.}\\ \end{array}$$

A business transaction that involves a purchase on account is considered to be a(n) a. cash transaction. b. credit transaction. c. investment of the owner d. expense transaction.

All accounts belong in one of the following classifications: Asset, Liability, Owner’s Equity. In your working papers, indicate the classification for each of the following accounts. 1. John Jones, Capital 2. Cash in Bank 3. Accounts Receivable 4. Accounts Payable 5. Office Equipment 6. Delivery Equipment 7. Camping Equipment 8. Building 9. Land 10. Computer Equipment

With a partner, use the internet or other appropriate resource to locate the American Psychological Association's Guidelines for Ethical Conduct in the Care and Use of Nonhuman Animals in Research. Study the guidelines and then prepare a short oral presentation summarizing what you learned. Discuss both the pros and cons of such research. At the end of your presentation, state your own opinions about whether nonhuman animals should be used in basic and applied research, and if so, whether the APA guidelines are appropriate.

Mannisto, Inc., uses the FIFO inventory cost flow assumption. In a year of rising costs and prices, the firm reported net income of $1,920,000 and average assets of$12,000,000. If Mannisto had used the LIFO cost flow assumption in the same year, its cost of goods sold would have been $320,000 more than under FIFO, and its average assets would have been$320,000 less than under FIFO.

Required: a. Calculate the firm’s ROI under each cost flow assumption. b. Suppose that two years later costs and prices were falling. Under FIFO, net income and average assets were $2,304,000 and$14,400,000, respectively. If LIFO had been used through the years, inventory values would have been $400,000 less than under FIFO, and current year cost of goods sold would have been$160,000 less than under FIFO. Calculate the firm’s ROI under each cost flow assumption.

Have you ever been introduced to someone at a party or other social gathering and discovered that you share the same birthday? It seems like an amazing coincidence when it occurs. In fact, how rare is this? As an example, suppose 4 people have gathered for a dinner party. We can determine the probability that at least 2 of the guests have the same birthday. (For simplicity, we will ignore the February 29th birthday from leap years.) Let E be the event that at least people share a birthday. It is easier to look at the complement

$$E ^ { C }$$

, the even that no one shares the same birthday. If we start with 1 of the guests, then the second guest cannot share the same birthday, so that person has 364 possible dates for his or her birthday from a total of 365. Thus the conditional probability that the second guest has a different birthday, given that we know the first person’s birthday, is

$$\frac { 364 } { 365 }$$

. Similarly, the third person has 363 possible birthday dates that do not coincide with those of the fi rst two guests. So the conditional probability that the third person does not share a birthday with either of the first 2 guests, given that we know the birthdays of the first 2 people, is

$$\frac { 363 } { 365 }$$

. The probability of the fourth guest having a distinct birthday is, similarly,

$$\frac { 362 } { 365 }$$

. We can use the Product Rule for Probabilities to find the probability that all of these conditions are met; that is, none of the 4 guests share a birthday.

$$P \left( E ^ { c } \right) = \frac { 364 } { 365 } \cdot \frac { 363 } { 365 } \cdot \frac { 362 } { 365 } \approx 0.984$$

. Then

$$P ( E ) = 1 - P \left( E ^ { c } \right) \approx 0.016$$

, so there is about a 1.6% chance that in a group of 4 people, 2 or more will have the same birthday. It would require 366 people gathered together to guarantee that 2 people in the group will have the same birthday. But how many people would be required to guarantee that the chance that at least 2 of them share the same birthday is at least 50/50? Make a guess before you proceed through the exercises. The results may surprise you! If 8 people are present at a meeting, fi nd the probability that at least 2 share a common birthday.

Lopez Company reports unadjusted first-year merchandise sales of $100,000 and cost of merchandise sales of$30,000.

a. Compute gross profit (using the unadjusted numbers above).