Question

Chapter Four Homework Required information (The following information applies to the questions displayed below) Part 2 of 2 Oscar's Red Carpet Store maintains a checking account with Academy Bank. Oscar's sells carpet each day but makes bank deposits only once per week. The following provides information from the company's cash ledger for the month ending February 28, 2021. Date Amount $3,950 Deposits Amount $ 1,950 Checks! 1,550 2,450 3.350 Date 2/2 2/8 2/12 2/11 2/18 322 323 1,750 1.450 2/25 Cash receipts: 2/26-2/28 325 2/27 2/28 $10,150 126 127 2/ 1,150 $9.00 References Balance on February 1 Receipts Disbursements Balance on February 28 $6,ese 10,150 (9,600) $ 6,660 Information from February's bank statement and company records reveals the following additional information: a. The ending cash balance recorded in the bank statement is $9.675 b. Cash receipts of $850 from 2/26-2/28 are outstanding. c. Checks 325 and 327 are outstanding d. The deposit on 2/includes a customer's check for $200 that did not clear the bank (NSF check) e. Check 323 was written for $2,500 for advertising in February. The bank properly recorded the check for this amount An automatic withdrawal for Oscar's February rent was made on February 4 for $1.200. g. Oscar's checking account earns interest based on the average daily balance. The amount of interest earned for February is $125. h. In January, one of Oscar's suppliers, Titanic Fabrics, borrowed $4,500 from Oscar On February 24. Titanic paid $4,700 ($4,500 borrowed amount plus $200 Interest) directly to Academy Bank in payment for January's borrowing L Academy Bank charged service fees of $100 to Oscar's for the month.

Answer 1

The necessary cash adjustments are recorded as below:

Transaction	General Journal	Debit	Credit
1	Cash (4,500+325)	$4,825
	Notes Receivable		$4,500
	Interest Revenue (200+125)		$325
	(To record amounts that increase cash)
Transaction	General Journal	Debit	Credit
2	Accounts Receivable (NSF Check)	$200
	Advertising Expense (2,500-1,750)	$750
	Rent Expense	$1,200
	Service Fee Expense	$100
	Cash		$2,250
	(To record amounts that decrease cash)