PE-2: Instructions Paper
Problem Set
PE – 2
Instructions
1. Journalize the transactions and post to the accounts Debt Investments and Stock Investments. (Use the T account form.)
2. Prepare the adjusting entry at December 31, 2012, to report the investments at fair value. All securities are considered to be trading securities.
December 31, 212
Unrealized Loss Income 7,500
Market Adjustment Trading 7,500
3. Show the balance sheet presentation of investment securities at December 31, 2012.
Current Assets
Short Term Investment at Fair Value 54,000
4. Identify the income statement accounts and give the statement classification of each account.
Interest revenue: other revenue and gains Loss on sale of investments: other expenses and losses …show more content…
* Purchasing agent receives material he purchased.
b) Identify improvements for correcting these weaknesses.
IMPROVEMENTS
* All checks must be pre numbered
* Checks must be kept in a secured location.
* Purchasing agent should not make payments for material he purchases. This should be authorized and paid by the treasurer.
* Purchasing agent should not receive material he purchases, there should be a receiving person to control this process.
* Invoices that are paid should be marked as paid and kept in a safe location, recorded immediately in cash disbursement journal, in order to keep a real cash balance. An idea, the treasurer should make payments for all approved invoices. Have the purchasing agent approval for invoices.
E7-6
Instructions
a) What is the proper adjusted cash balance per bank?
Cash Balance per Bank $ 3,677.20
Add: Deposits in Transit 590.00
Less: Outstanding Checks (770.00)
Adjusted Balance per Bank $ 3,497.20
b) What is the proper adjusted cash balance per books?
Cash Balance per Books $ 3,975.20
Less: NSF Check
PE – 2
Instructions
1. Journalize the transactions and post to the accounts Debt Investments and Stock Investments. (Use the T account form.)
2. Prepare the adjusting entry at December 31, 2012, to report the investments at fair value. All securities are considered to be trading securities.
December 31, 212
Unrealized Loss Income 7,500
Market Adjustment Trading 7,500
3. Show the balance sheet presentation of investment securities at December 31, 2012.
Current Assets
Short Term Investment at Fair Value 54,000
4. Identify the income statement accounts and give the statement classification of each account.
Interest revenue: other revenue and gains Loss on sale of investments: other expenses and losses …show more content…
* Purchasing agent receives material he purchased.
b) Identify improvements for correcting these weaknesses.
IMPROVEMENTS
* All checks must be pre numbered
* Checks must be kept in a secured location.
* Purchasing agent should not make payments for material he purchases. This should be authorized and paid by the treasurer.
* Purchasing agent should not receive material he purchases, there should be a receiving person to control this process.
* Invoices that are paid should be marked as paid and kept in a safe location, recorded immediately in cash disbursement journal, in order to keep a real cash balance. An idea, the treasurer should make payments for all approved invoices. Have the purchasing agent approval for invoices.
E7-6
Instructions
a) What is the proper adjusted cash balance per bank?
Cash Balance per Bank $ 3,677.20
Add: Deposits in Transit 590.00
Less: Outstanding Checks (770.00)
Adjusted Balance per Bank $ 3,497.20
b) What is the proper adjusted cash balance per books?
Cash Balance per Books $ 3,975.20
Less: NSF Check