McDermott Company's bank statement for September 30 showed an ending cash balance of $1,350. The company's Cash account in its general ledger showed a $995 debit balance.The following information was also available as of September 30.The bank deducted $125 for an NSF check from a customer deposited on September 15. 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 September 30 bank statement. A $15 debit memorandum for checks printed by the bank was included with the canceled checks. Outstanding checks amounted to $1,145. Included with the bank statement was a credit memo in the amount of $875 for an EFT in payment of a customer's account. Included with the canceled checks was a
check for $275, drawn on the account of another company. Required: Part a. Prepare a bank reconciliation as of September 30.Part b. Prepare the journal entries for the items on the company's bank reconciliation as of September 30.
What will be an ideal response?
Part a.
Part b.
| Sept. 30 | Cash | 875 | ? |
| ? | Accounts Receivable | ? | 875 |
| ? | ? | ? | ? |
| Sept. 30 | Accounts Receivable | 125 | ? |
| ? | Cash | ? | 125 |
| ? | ? | ? | ? |
| Sept. 30 | Office Expenses | 15 | ? |
| ? | Cash | ? | 15 |
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A study has been conducted to determine if Product A should be dropped. Sales of the product total $500,000; variable expenses total $340,000. Fixed expenses charged to the product total $210,000. The company estimates that $60,000 of these fixed expenses are not avoidable even if the product is dropped. If Product A is dropped, the annual financial advantage (disadvantage) for the company of eliminating this product should be:
A. ($50,000) B. $10,000 C. $50,000 D. ($10,000)
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