![Having completed your Introduction to Financial Accounting module with high marks, your<br>lecturer referred you to an Accounting firm who needed assistance with several accounting<br>tasks for some clients:<br>Problem 1<br>Journals, Bank Reconciliation & Adjusting Entries<br>Wellfield Corporation's Accountant is on maternity leave for the period of 3-months (May-<br>July). The office clerk was performing her duties however given his lack of Accounting<br>knowledge the Director contacted you to bring their accounting records up to par.<br>You discovered the following:<br>The following transactions were not recorded:<br>May 2<br>May 5<br>Took out $35,000 notes payable from the bank.<br>Purchased $2,800 worth of supplies on credit. This will last for several<br>months.<br>May 7<br>May 8<br>Collected $ 9,900 from clients for services to be performed.<br>Purchased equipment for $21,000, paying $11,000 cash and the balance<br>on account.<br>May 15<br>May 17<br>June 2<br>Billed clients for services provided, $14,000.<br>Paid $700 in cash for the current month's rent.<br>Paid $1,200 for supplies purchased on May. 5.<br>Paid $4,800 cash on balance owed for equipment.<br>Paid $2,200 cash for utilities.<br>Declared and paid a €1,000 cash dividend.<br>June 15<br>July 25<br>Jul 31<br>An analysis of the accounts shows that no adjusting entries were prepared for the maternity<br>leave period:<br>](https://s3.us-east-1.amazonaws.com/storage.unifolks.com/qimg-008/008_5wjyzj0-p4izbucg.png)
Extracted text: Having completed your Introduction to Financial Accounting module with high marks, your lecturer referred you to an Accounting firm who needed assistance with several accounting tasks for some clients: Problem 1 Journals, Bank Reconciliation & Adjusting Entries Wellfield Corporation's Accountant is on maternity leave for the period of 3-months (May- July). The office clerk was performing her duties however given his lack of Accounting knowledge the Director contacted you to bring their accounting records up to par. You discovered the following: The following transactions were not recorded: May 2 May 5 Took out $35,000 notes payable from the bank. Purchased $2,800 worth of supplies on credit. This will last for several months. May 7 May 8 Collected $ 9,900 from clients for services to be performed. Purchased equipment for $21,000, paying $11,000 cash and the balance on account. May 15 May 17 June 2 Billed clients for services provided, $14,000. Paid $700 in cash for the current month's rent. Paid $1,200 for supplies purchased on May. 5. Paid $4,800 cash on balance owed for equipment. Paid $2,200 cash for utilities. Declared and paid a €1,000 cash dividend. June 15 July 25 Jul 31 An analysis of the accounts shows that no adjusting entries were prepared for the maternity leave period:
![1. The equipment depreciates $320 per month.<br>2. One-third of the $9,900 Unearned Service Revenue received in May, was earned<br>during the period.<br>3. Interest totaling $1,500 is accrued for the period.<br>4. Of the Supplies purchased on May 5, $840 remain on hand at the end of July.<br>5. Insurance expires at the rate of $400 per month.<br>6. Salaries of $3,600 were unpaid.<br>For the month of July, the cash records reflect a balance of $14,930 while its bank<br>statement balance was $14,150. A more detailed review reveals several reconciling items:<br>i. Deposits in transit amounted to $9,190.<br>ii. Included in the bank statement as at July 31, 2021 were the following memoranda:<br>• Credit Memorandum: a note for $1,690 and interest of $110 had been collected<br>by the bank and the bank charged a collection fee of $40.<br>• Debit Memorandum: $90 for service charges for the month of July 2021.<br>iii. Outstanding cheques:<br>• Cheque #224 for $4,340<br>• Cheque #232 for $1,254<br>• Cheque #237 for $2,453<br>iv. Check no. 242 was issued to pay for purchases (Accounts Payables) in the amount<br>of $791 but had been entered in the cash journal as $719 in error.<br>v. Included in the company deposits for July 2021 was a cheque for $1,235, but the<br>bank has returned this cheque as NSF.<br>REQUIRED:<br>d.<br>Prepare the Bank Reconciliation Statement.<br>](https://s3.us-east-1.amazonaws.com/storage.unifolks.com/qimg-008/008_ownyzj0-f5ur2udh.png)
Extracted text: 1. The equipment depreciates $320 per month. 2. One-third of the $9,900 Unearned Service Revenue received in May, was earned during the period. 3. Interest totaling $1,500 is accrued for the period. 4. Of the Supplies purchased on May 5, $840 remain on hand at the end of July. 5. Insurance expires at the rate of $400 per month. 6. Salaries of $3,600 were unpaid. For the month of July, the cash records reflect a balance of $14,930 while its bank statement balance was $14,150. A more detailed review reveals several reconciling items: i. Deposits in transit amounted to $9,190. ii. Included in the bank statement as at July 31, 2021 were the following memoranda: • Credit Memorandum: a note for $1,690 and interest of $110 had been collected by the bank and the bank charged a collection fee of $40. • Debit Memorandum: $90 for service charges for the month of July 2021. iii. Outstanding cheques: • Cheque #224 for $4,340 • Cheque #232 for $1,254 • Cheque #237 for $2,453 iv. Check no. 242 was issued to pay for purchases (Accounts Payables) in the amount of $791 but had been entered in the cash journal as $719 in error. v. Included in the company deposits for July 2021 was a cheque for $1,235, but the bank has returned this cheque as NSF. REQUIRED: d. Prepare the Bank Reconciliation Statement.