Introduction to Financial Accounting
Assignment # 2 Fall 2023
Weight 5%
Name: ________________________________________________________
Problem # 1
(12 Mrks)
The Brown Company bank statement for September 30, 19X1, showed a balance of $1,681.50.
The company’s cash account sowed a $1,305.20 debit balance. The following information was
also available.
a. A customer’s cheque for $90 marked NSF was returned to the Brown Company by the
bank. The bank charged the company’s account a $10 processing fee.
b. The September 30 cash receipts, $1,250, were placed in the bank’s night depository
after banking hours on that date and this amount did not appear on the bank statement.
c. A $15.10 debit memorandum for cheques printed by the bank was included with the
cancelled cheques.
d. Outstanding cheques amounted to $1,141.40.
e. A customer’s note for $920 was collected by the bank. A collection fee of $20 was
deducted by the bank.
f. Included with the cancelled cheques was a cheque for $300, drawn on another
company, the Browne Bros.
Prepare a Bank Reconciliation in good form.
Problem # 2
(12 Marks)
Prepare general journal entries for the following transactions involving short-term investments
in securities available for sale (assume no investments were held prior to the following
transactions):
a. Feb. 16 – Purchased 800 shares of $10 par common stock of GN Corp. @ $30 per
share.
b. Feb. 26 – Purchased 500 shares of $5 par common stock of Honeyville Corp. @ $20 per
share.
c. Mar. 2 – Received $3 per share dividends on GN stock.
d. Mar. 28 – Sold 200 shares of GN Corp. @ $33 per share.
e. Apr. 20 – Sold 150 shares of Honeyville Corp. at $19 per share.
Problem # 3 (12 Marks)
The payroll records of Jasper Co. provided the following data for the weekly pay period ended
December 7.
Employee
A
B
C
Gross
Pay
$500
600
700
Previous Income
Week
Taxes
$6,000
$100
6,500
120
5,500
202
Medical
Insurance
Deduction
$30
30
50
Union
Dues
$15
15
0
United
Way
$10
20
30
Canada Pension Plan is 3.2 percent of the pensionable earnings and
Employment Insurance is 2.7 percent of the Insurable earnings.
Prepare the journal entries to accrue the payroll and to record payroll tax
expense.