Question

Jamison Company developed the following reconciling information in preparing its June bank reconciliation: Cash balance per bank, 6/30 $10,325 Note receivable collected by bank 5,430 Outstanding checks 5,789 Deposits-in-transit 3,482 Bank service charge 67 NSF check 1,042 Using the above information, determine the cash balance per books (before adjustments) for Jamison Company. $12,339 $8,018 $3,697 $14,646 Previous

Answer 1

Q 2

The perpetual inventory system is one in which a company maintains the records of its inventory. FIFO is First in First out meaning that the stock bought/ entered first will be sold first. The question has asked for the COGS for the sale of May 20.

On May 20, 5 goods were sold, which means the previous stock (of 3) will be utilised first and then the next (remaining 2 ) will be taken from the next entry.

So, the COGS = 3*17 + 2*18 = 51+36 = 87$. So, the correct answer is (D)

Q 3

2/10 n 30 means discount of 2% on the invoice if payment is made within 10 days of the 30-day credit period.

So, if the payment is made by Isabelle & Co in the discount period, the effective is 98% of 15000$ or a discount of 2% of 15000$ (i.e. 300$). So, for this transaction the net cash outflow is 15000+750-300 = $15450. Now, this will be a credit entry and a corresponding debit in the accounts payable. So, the correct answer is (D)