Reference no: EM131883326

Problem 1 - The May 31, 2012, balance per bank statement for Upton Company was $7,200. The cash balance per books was $9,500. Outstanding checks amounted to $800, and deposits in transit were $2,400. The bank statement contained an NSF check for $500, a service charge for $25, and a debit memo for direct payment of the telephone bill of $175.

Required:

1) Prepare a bank reconciliation to determine the true cash balance at May 31, 2012.

Problem 2 - Scott Company is a merchandising business that was started in 2012. Scott uses the perpetual inventory system. It experienced the following events during 2012.

1. Acquired $25,000 cash by issuing common stock

2. Purchased inventory on account that cost $14,000, terms 2/10, n/30

3. Sold inventory that had cost $8,400 for $15,000 cash

4. Paid for the merchandise referred to in event 2, within the discount period

Required:

1) Record the events in the financial statements model below; include column totals.

2) Prepare an income statement for 2012.

3) What is the amount of total assets at the end of 2012?