Question

The Scooter Warehouse provided the following information at December 31, 2013:

Bank Reconciliation
General ledger cash        balance, 12/31/13		$	17,566			Bank statement balance,        12/31/13		$	16,306
Bank service charge			(25	)		Deposits in transit			2,450
Returned customer checks        marked NSF			(375	)		Outstanding checks			(1,356	)
Error in recording of office      supplies			234
Adjusted cash balance,       12/31/13		$	17,400			Adjusted cash balance,       12/31/13		$	17,400

Investment in securities

The company invested $26,000 in a portfolio of investment in securities on December 22, 2013. The portfolio's market value on December 31, 2013, had increased in value to $28,500.

Notes Receivable

On November 1, 2013, The Scooter Warehouse sold 25 scooters to Bermuda Fantasy Resort for $65,000. The resort paid $5,000 at the point of sale and issued a one-year, $60,000, 5 percent note for the remaining balance. The note, plus accrued interest, is due in full on October 31, 2014. The Scooter Warehouse adjusts for accrued interest revenue monthly.

Accounts Receivable

The Scooter Warehouse uses a statement of financial position approach to account for impairment loss of receivable. Outstanding accounts receivable on December 31, 2013, total $450,000. After aging these accounts, the company estimates that their estimated collectible amount is $435,000. Prior to making any adjustment to record impairment loss, The Scooter Warehouse's Allowance for Impairment has a credit balance of $4,000.

a.	Prepare the journal entry necessary to update the company's accounts immediately after performing its bank reconciliation on December 31, 2013. (Omit the "$" sign in your response.)

Date	General Journal	Debit	Credit
Dec. 31	(Click to select)CashImpairment loss of receivableAccounts payableAccounts receivableInterest receivableBank service chargesInvestments in securitiesOffice supplies
	(Click to select)Office suppliesInvestments in securitiesCashInterest receivableBank service chargesAccounts receivableImpairment loss of receivableAccounts payable
	(Click to select)Accounts payableImpairment loss of receivableBank service chargesOffice suppliesAccounts receivableCashInvestments in securitiesInterest receivable
	(Click to select)Accounts receivableInvestments in securitiesImpairment loss of receivableInterest receivableAccounts payableCashOffice suppliesBank service charges

Answer 1

a.

Account Titles	Debit	Credit
Bank Service Charge	$                   25
Accounts Receivable	$                375
Office Supplies		$                    234
Cash		$                    166