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AC1220 Accounting I Lab 4.1 - Document preview page 1

AC1220 Accounting I Lab 4.1 - Page 1

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AC1220 Accounting I Lab 4.1

A lab exercise for AC 1220 Accounting I, focusing on accounting principles and practices.

Claire Mitchell
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AC1220 Accounting I Lab 4.1 - Page 1 preview imageAC1220 ACCOUNTING ILab4.11AC1220Accounting ILab4.1Based on the provided scenario for Jake’s Computer Sale and Repair, answer the following:1.Bank ReconciliationPrepare the bank reconciliation for Jake’s Computer Sale and Repair as of May 31, 20x1, based on theinformation provided in the question.2.Journal EntriesMake the necessary journal entries to reconcile the cash account with the bank statement for the transactions described. Ensure to account for thecorrected prepaid advertising, NSF check, interest earned, and bank service charges.3.Internal Control IssuesJake is considering expanding Dave's responsibilities to include journalizing all sales and inventory-related transactions. Identify the internalcontrol issues that could arise from this decision. Provide at least one example of a potential problem and suggest a solution to mitigate that issue.Word Count Requirement:750-1,000 words.
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AC1220 Accounting I Lab 4.1 - Page 2 preview image
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AC1220 Accounting I Lab 4.1 - Page 3 preview imageAC1220 ACCOUNTING ILab4.12AC1220Lab 4.1IntroductionOn May31,20x1,Jakeobtains abank statement fromNinth-Bank.According to the bank statement, the business bank accountof Jake’s Computer Sale andRepairhas an ending balance of $33,895onMay 31, 20x1.The cash accountin the booksof Jake’s Computer Sale and Repair shows an ending balance of$44,640.Jakenotesthe following items:•Jake deposited $11,600inNinth-Bank on May 30.Thebank has not yet credited this amount to the business bank account.•The following checks written by Jakehave not yet been presented to Ninth-Bankfor payment:oCheck#125:$350oCheck#131: $1,100oCheck#138: $90•Jake’s ComputerSaleand Repair presently has $800 in prepaid advertising on its books. The advertising agency had overcharged Jake’s ComputerSaleand Repair by $150. The advertising agencycorrectsthe error anddepositsthe amount directly into the business bank account.•Bank service charges per the bank statementare$35.•Interest earned onthebank balanceis$10.•A checkfor $250,previously recorded as a paymentby a customeron an account receivable,was returned marked“nonsufficient funds”(NSF).•The bank incorrectlydebitedthebankaccountofJake’s ComputerSaleand Repairfor $560.This amountin factrelates toa check drawn on theaccount of adifferent business, Jack’s Car Salesand Repairs.
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Document Details

University
ITT Technical Institute Chantilly
Course
AC 1220
Subject
Accounting

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