I – AUDIT OF CASH AND CASH EQUIVALENTS SUMMARY OF PROBLEMS PROBLEM NO. 1 – Composition of cash and cash equivalents PROBLEM NO. 2 – Computation of adjusted cash and cash equivalents (including preparation of adjusting entries) PROBLEM NO. 3 – Cash count and shortage computation (including preparation of adjusting entries) PROBLEM NO. 4 – Bank reconciliation using the three methods (including preparation of adjusting entries) PROBLEM NO. 5 – Bank reconciliation and shortage computation (including preparation of adjusting entries) PROBLEM NO. 6 – Cash shortage computation (including reconstruction of cash balance) PROBLEM NO. 7 – Proof of cash using the three methods (including preparation of adjusting entries) PROBLEM NO. 8 – Proof of cash using the three methods (including preparation of adjusting entries) PROBLEM NO. – Proof of cash using the three methods (including preparation of adjusting entries) PROBLEM NO. 1! – Proof of cash (including computation of ending deposit in transit and outstanding checks) PROBLEM NO. 11 – Proof of cash using the three methods (including determination of reconciling items) PROBLEM NO. 12 – Proof of cash using bank to book method PROBLEM NO. 13 – Proof of cash using bank to book method (including hypothecation of accounts receivable) PROBLEM NO. 14 – Three-dated bank reconciliation using adjusted balance method (including computation of deposits in transit and outstanding checks) PROBLEM NO. 15 " Theory
PROBLEM NO. 1 3 P4TC Corporation tems included! Current account at Metrobank Payroll account Foreign bank account (in equiv uivalent ent pesos) Travelers c!eck Money or"er Petty cas! un" 3 currency Ti%e "eposit & #0 "ays Treasur reasury y bills, bills, "ue ##11 ##11# # (purc! (purc!ase ase" " 1'#1 1'#11') 1')
1,800,000 500,000 800,000 50,000 #0,000 $,000 '00,000 '00,00 '00,000 0 #,58$,000
tems not included! Current account at llie" *ank (100,000) "hort term borro#ing +avings "eposit in a close" bank 150,000 $ther noncurrent assets Postage sta%ps 1,000 %nused supplies ($ther C&) %ployees post "ate" c!eck $,000 Trade and other receivables -./ ro% e%ployees 10,000 Trade and other receivables Cre"it Cre"it %e%o ro% a ven"or or a purc!ase purc!ase return return '0,000 'eduction from accounts payable Petty cas! un" 3 epense receipts ,000 penses Pension un" ',000,000 *oncurrent asset 2-F c!eck o custo%er 15,000 Trade and other receivables Custo%ers c!eck "ate" 111# 80,000 Trade and other receivables Money %arket place%ent ("ue #01#) 500,000 "hort term investment Treas reasur ury y bill bills, s, "ue "ue 1#1 1#11 1# # (pur (purc! c!as ase" e" '1 '11') 1') #00, #00,00 000 0 "hort term investment
PROBLEM NO. 1 3 P4TC Corporation tems included! Current account at Metrobank Payroll account Foreign bank account (in equiv uivalent ent pesos) Travelers c!eck Money or"er Petty cas! un" 3 currency Ti%e "eposit & #0 "ays Treasur reasury y bills, bills, "ue ##11 ##11# # (purc! (purc!ase ase" " 1'#1 1'#11') 1')
1,800,000 500,000 800,000 50,000 #0,000 $,000 '00,000 '00,00 '00,000 0 #,58$,000
tems not included! Current account at llie" *ank (100,000) "hort term borro#ing +avings "eposit in a close" bank 150,000 $ther noncurrent assets Postage sta%ps 1,000 %nused supplies ($ther C&) %ployees post "ate" c!eck $,000 Trade and other receivables -./ ro% e%ployees 10,000 Trade and other receivables Cre"it Cre"it %e%o ro% a ven"or or a purc!ase purc!ase return return '0,000 'eduction from accounts payable Petty cas! un" 3 epense receipts ,000 penses Pension un" ',000,000 *oncurrent asset 2-F c!eck o custo%er 15,000 Trade and other receivables Custo%ers c!eck "ate" 111# 80,000 Trade and other receivables Money %arket place%ent ("ue #01#) 500,000 "hort term investment Treas reasur ury y bill bills, s, "ue "ue 1#1 1#11 1# # (pur (purc! c!as ase" e" '1 '11') 1') #00, #00,00 000 0 "hort term investment
PROBLEM NO. 2 3 P4TC Corporation +equirement *o, ,a Cas! on !an", per trial balance (a) 7+F c!eck (b) Post "ate" c!eck receive" Cas! on !an", as a"uste" &djusting journal entries! entries! ccounts receivable Cas! on !an" ccounts receivable Cas! on !an" +equirement *o, ,b Petty cas! un" per total %ployees9 vales Curre urrenc ncy y in env envelop elope e %arke arke" " :col :colle lect ctiions ons or or c!ar !arity: ty: /nreplenis!e" petty cas! vouc!ers Petty cas! un", as a"uste" <ernative computation! computation! Currency an" coins 4eplenis!%ent c!eck Petty cas! un", as a"uste" &djusting journal entries! entries! "vances to oicers an" e%ployees e%ployees penses Cas! s!ortover (balancing (balancing figure or see computation belo# Petty cas! un" (P10,000 3 P,600) Computation of shortage! Currency an" coins %ployees9 vales /nreplenis!e" petty cas! vouc!ers 4eplenis!%ent c!eck Cas! an" cas! ite%s counte" Cas! accountability /naccounte"+!ortage +equirement *o, ,c *P- current account, per trial balance /nrelease" c!eck Post "ate" c!eck "elivere" *P- current account, as a"uste" &djusting journal entries! entries! *P- current account ccounts payable ccounts receivable Cas! on !an"
+equirement *o, ,d Cas! on !an" (see no< 1
#6',000 (0,000) (#0,000) '8',000
0,000 0,000 #0,000 #0,000
10,#00 (1,00) (1, (1,'00) '00) (800) ,600 ',100 $,00 ,600
1,00 800 ;00 #,#00
',100 1,00 800 $,00 ;,100 10,000 (;00)
;50,000 50,000 8,000 1,08,000
50,000 50,000 8,000 8,000
'8',000 ,600 1,08,000 1,'80,000 ($0,000)
1,'$0,000 #00,000 ',;1$,600
*ote! The P.//0/// P*B savings account should should be presented separately from
cash and cash equivalents since it has been earmarked for the acquisition of a noncurrent asset,
PROBLEM NO. 3 3 4upee Co%pany +equirement *o, Bills and coins 2eno%ination P100<00 50<00 '0<00 10<00 1<00 0<50 0<'5
=uantity 10 80 60 5$ $10 #'$ $
%ount 1,000 $,000 1,$00 5$0 $10 1' 1
Total
6,5'8
Checks 2ate 2ra>er 2ec< #0 Ms< ?essie 2ec< #0 4obert 2ec< #1 ?ay r 2ec< #1 Francis 2ec< #1 4yan
%ount ',$00 '8,000 #,#0 #5,00 1,00
2ate ccount 2ec< '# "vances 2ec< '6 Postage 2ec< '; Transportation 2ec< '; 4epairs Total cas! an" cas! ite%s counte" @ess accountabilitiesA Petty cas! /n"eposite" collections 3 per .4 /n"eposite" collections 3 >it!out .4 cess travel a"vance returne" /nclai%e" salaries Cas! s!ortage
%ount 1$,000 #,'$0 #00 1,00
85,;0
%nreplenished vouchers
'0,000 8,00 '8,000 #,#0 15,000
1;,1$0 &1 23 11','8
&1 4 &1 5 15',;0 &1 . ($0,##') &1 6
+equirement *o, 3 1 "vances to oicers an" e%ployees Postage epense Transportation epense 4epairs an" %aintenance Petty cas! un" ' /nuse" postage Postage epense
1$,000 #,'$0 #00 1,00 1;,1$0 6#0 6#0
# Travel epense BP;,000P800(P003P'$0)D Petty cas! un" (personal c!eck o sales %anager) "vances to oicers an" e%ployees
10,10 #,#0
$ Cas! ccounts receivable
'8,000
5 Cas! +alaries payable
15,000
Cas! s!ortover (+eceivable from custodian) Cas!
$0,##'
7 Cas! ccounts payable
5$,000
1#,5'0
'8,000
15,000
$0,##'
5$,000
PROBLEM NO. 4 3 2ollar Co%pany DOLLAR COMPANY *ank 4econciliation 3 *ank to *ook Met!o" 2ece%ber #1, '01' *alance per bank "" ("e"uct)A a) Custo%er9s uncollectible c!eck (7+F) b) 2is!onore" note receivable (inclu"ing P',000 protest ee) c) *ook error in recor"ing collection (P15,$00 3 P1$,500) ") *ook errors in recor"ing "isburse%ents C!eck no< 1$' (P1',$'5 3 P1','$5) 3 un"er C!eck no< 15 (P#,';0 3 P#',;00) 3 over e) 2ece%ber bank service c!arges ) 7ote collecte" by bank (inclu"ing interest inco%e o P1,000 an" net o service c!arge o P500) g) 2eposits in transit !) .utstan"ing c!ecks -) *ank error in recor"ing "eposit ) Petty cas! un" k) +tolen cas! sales to be recovere" ro% insurance co< l) 2ouble counte" "eposit 3 7+F *alance per books
10,000 #0,000 ',000 (;00) 180 (';,10) 1,8#0 ('5,500) '$,000 (#5,000) ('0,000) 10,000 0,000 '0,000 '0#,000
DOLLAR COMPANY *ank 4econciliation 3 *ook to *ank Met!o" 2ece%ber #1, '01' *alance per books "" ("e"uct)A a) Custo%er9s uncollectible c!eck (7+F) b) 2is!onore" note receivable (inclu"ing P',000 protest ee) c) *ook error in recor"ing collection (P15,$00 3 P1$,500) ") *ook errors in recor"ing "isburse%ents C!eck no< 1$' (P1',$'5 3 P1','$5) 3 un"er C!eck no< 15 (P#,';0 3 P#',;00) 3 over e) 2ece%ber bank service c!arges ) 7ote collecte" by bank (inclu"ing interest inco%e o P1,000 an" net o service c!arge o P500) g) 2eposits in transit !) .utstan"ing c!ecks -) *ank error in recor"ing "eposit ) Petty cas! un" k) +tolen cas! sales to be recovere" ro% insurance co< l) 2ouble counte" "eposit 3 7+F *alance per bank
'0#,000 (#0,000) (',000) ;00 (180) ';,10 (1,8#0) '5,500 ('$,000) #5,000 '0,000 (10,000) (0,000) ('0,000) 10,000
PROBLEM NO. 4 3 2ollar Co%pany DOLLAR COMPANY *ank 4econciliation 3 "uste" *alance Met!o" 2ece%ber #1, '01' BAN# /na"uste" balances, 2ece%ber #1 10,000 "" ("e"uct)A a) Custo%er9s uncollectible c!eck (7+F) b) 2is!onore" note receivable (inclu"ing P',000 protest ee) c) *ook error in recor"ing collection (P15,$00 3 P1$,500) ") *ook errors in recor"ing "isburse%ents C!eck no< 1$' (P1',$'5 3 P1','$5) 3 un"er C!eck no< 15 (P#,';0 3 P#',;00) 3 over e) 2ece%ber bank service c!arges ) 7ote collecte" by bank (inclu"ing interest inco%e o P1,000 an" net o service c!arge o P500) g) 2eposits in transit '$,000 !) .utstan"ing c!ecks (#5,000) -) *ank error in recor"ing "eposit ('0,000) ) Petty cas! un" k) +tolen cas! sales to be recovere" ro% insurance co< l) 2ouble counte" "eposit 3 7+F "uste" balances, 2ece%ber #1
65,000
Adjusting Journal Entries
1) ccounts receivable Cas! in bank
#0,000
') 7otes receivable 3 "is!onore" Cas! in bank
',000
7otes receivable 3 "iscounte" 7otes receivable
0,000
#0,000 ',000 0,000
#) Cas! in bank ccounts receivable
;00
$) ccounts payable Cas! in bank
180
5) Cas! in bank ccounts payable
';,10
;00 180 ';,10
) *ank service c!arge Cas! in bank
1,8#0
6) Cas! in bank *ank service c!arge 7otes receivable -nterest inco%e
'5,500 500
8) Petty cas! un" Cas! in bank
10,000
;) Clai%s ro% insurance co< Cas! in bank
0,000
10) ccounts receivable Cas! in bank
1,8#0
'5,000 1,000 10,000 0,000 '0,000 '0,000
BOO#S '0#,000 (#0,000) &1 *o, (',000) &1 *o, 3 ;00 &1 *o, 5 (180) &1 *o, 4 ';,10 &1 *o, . (1,8#0) &1 *o, 6 '5,500 &1 *o, 7
(10,000) &1 *o, 8 (0,000) &1 *o, 9 ('0,000) &1 *o, / 65,000
PROBLEM NO. 5 3 +>erte Co%pany +equirement *o, ,a /na"uste" "eposit in transit Post "ate" c!eck receive" "uste" "eposit in transit
165,'50 (50,000) 1'5,'50
+equirement *o, ,b /na"uste" outstan"ing c!ecks /nrelease" c!eck Post "ate" c!eck issue" "uste" outstan"ing c!ecks
'$,650 (1$,650) (#6,'10) 1;$,6;0
+equirement *o, ,c2d /na"uste" balances "" ("e"uct) a"ust%entsA Post "ate" c!eck receive" 2eposit in transit (see 1
*ank #50,000
*ooks ';#,500 (50,000) &1
1'5,'50 1$,650 &1 3 #6,'10 &1 5 15,000 &1 4 (1;$,6;0) (#0,000) '50,$0 '50,$0
#10,$0 (0,000) &1 . '50,$0
+equirement *o, 3 1 ccounts receivable Cas!
50,000
' Cas! ccounts payable
1$,650
# Cas! ccounts payable
#6,'10
$ Cas! 7otes receivable
15,000
5 Cas! s!ortover (+eceivable from cashier ) Cas!
0,000
50,000
1$,650
#6,'10
15,000
0,000
PROBLEM NO. 6 3 2avao Co%pany /na"uste" balance per bank, 1'#1 .utstan"ing c!ecks , 1'#1 /n"eposite" collections, 1'#1 "uste" balance per bank, 1'#1 (Cas! accounte") Cas! balance per books, 1'#1Cas! accountability (see co%putation bel Cas! over (s!ort) Computation of cash balance per books0 3:5 Cas! receiptsA .>ners9 invest%ent Procee"s ro% loan Collections ro% custo%ers (see co%putation belo>) Total Cas! "isburse%entsA Purc!ases (P'50,000 3 P15,000) +tore itures (P50,000 3 P5,000) @oan pay%ent penses pai" Cas! balance per books, 1'#1 Computation of collections from sales Purc!asesTE+ @ess %erc!an"ise inventory, 1'#1 Cost o sales "" gross proit (P''0,000 1'0) +ales @ess accounts receivable, 1'#1 Collections ro% sales
;1,500 ($,500) 5,000 ;',000 1'',000 (#0,000)
150,000 ;8,000 $1$,000 ',000 '#5,000 $5,000 80,000 180,000
5$0,000 1'',000
'50,000 #0,000 ''0,000 '$,000 $8$,000 60,000 $1$,000
PROBLEM NO. 7 3 uro Co%pany E$%& C&'()*+ Proo o Cas! 3 *ank to *ook Met!o" For t!e %ont! o 2ece%ber, '01' *eginning /na"uste" bank balances /n"eposite" collections 7ove%ber 2ece%ber .utstan"ing c!ecks 7ove%ber 2ece%ber Custo%ers9 note collecte" by bank 7ove%ber 2ece%ber *ank service c!arges 7ove%ber 2ece%ber rroneous bank "ebits 7ove%ber 2ece%ber rroneous bank cre"its 7ove%ber 2ece%ber 7+F c!ecks not re"eposite" 7ove%ber 2ece%ber 7+F c!eck re"eposite" /na"uste" book balances
4eceipts
'#0,000
$'0,000
'00,000
('00,000) 1'0,000
(80,000)
(100,000)
500,000
100,000 (1'0,000)
./0///
(0,000)
(1'0,000) ',000 (#,000)
#,000
('0,000)
'0,000
(10,000)
($0,000)
($0,000) (#0,000)
5,000
''6,000
n"ing
1'0,000 (80,000) 0,000
',000
10,000
2isb
(#0,000)
(10,000)
5,000 (6,000) (10,000)
'60,000
$06,000
6,000
;0,000
PROBLEM NO. 7 3 uro Co%pany E$%& C&'()*+ Proo o Cas! 3 *ook to *ank Met!o" For t!e %ont! o 2ece%ber, '01' *eginning /na"uste" book balances 3370/// /n"eposite" collections 7ove%ber ('00,000) 2ece%ber .utstan"ing c!ecks 7ove%ber 80,000 2ece%ber Custo%ers9 note collecte" by bank 7ove%ber 100,000 2ece%ber *ank service c!arges 7ove%ber (',000) 2ece%ber rroneous bank "ebits 7ove%ber (10,000) 2ece%ber rroneous bank cre"its 7ove%ber $0,000 2ece%ber 7+F c!ecks not re"eposite" 7ove%ber (5,000) 2ece%ber 7+F c!eck re"eposite" /na"uste" bank balances
'#0,000
4eceipts '60,000
2isb $06,000
'00,000 (1'0,000)
n"ing ;0,000
(1'0,000) 80,000 (0,000)
(100,000) 1'0,000
0,000
1'0,000 (',000) #,000
(#,000)
'0,000
('0,000)
10,000
$0,000 #0,000
10,000 $'0,000
#0,000 (5,000) 6,000 10,000 500,000
(6,000)
150,000
PROBLEM NO. 7 3 uro Co%pany E$%& C&'()*+ Proo o Cas! 3 "uste" *alance Met!o" For t!e %ont! o 2ece%ber, '01' *eginning /na"uste" bank balances /n"eposite" collections 7ove%ber 2ece%ber .utstan"ing c!ecks 7ove%ber 2ece%ber rroneous bank "ebits 7ove%ber 2ece%ber rroneous bank cre"its 7ove%ber 2ece%ber 7+F c!eck re"eposite"
"uste" book balances
'#0,000
$'0,000
'00,000
('00,000) 1'0,000
(80,000)
10,000
500,000
n"ing ./0///
1'0,000 (80,000) 0,000
(0,000)
('0,000)
'0,000
($0,000) (#0,000) (10,000)
(10,000)
#'0,000
';0,000
$10,000
'00,000
3370///
'60,000
$06,000
;0,000
100,000
(100,000) 1'0,000
(',000)
(5,000)
#'0,000
';0,000
Adjusting journal entries:
1) Cas! in bank 7ote receivable
2isb
(10,000)
($0,000)
"uste" bank balances
/na"uste" book balances Custo%ers9 note collecte" by bank 7ove%ber 2ece%ber *ank service c!arges 7ove%ber 2ece%ber 7+F c!ecks 7ove%ber 2ece%ber
4eceipts
1'0,000 1'0,000
') *ank service c!arge Cas! in bank
#,000
#) ccounts receivable Cas! in bank
6,000
#,000
6,000
(#0,000)
1'0,000 &1 (',000) #,000
(#,000) &1 3
(5,000) 6,000
(6,000) &1 5
$10,000
'00,000
PROBLEM NO. 8 3 Cebu Co%pany C,-$ C&'()*+ Proo o Cas! 3 *ank to *ook Met!o" For t!e %ont! o 2ece%ber, '01'
*alances per bank (a,g) 2eposits in transit (b) 7ove%ber #0 2ece%ber #1 .utstan"ing c!ecks (c,) 7ove%ber #0 2ece%ber #1 (P#,860 3 P600) *ank collections not in books (") 7ove%ber #0 2ece%ber #1 *ank service c!arges not in books (e) 7ove%ber #0 2ece%ber #1 2-F c!ecks 4eturne" in 2ec<, not recor"e" (!) 4eturne" in 7ov<, recor"e" in 2ec< (i) 4eturne" an" recor"e" in 2ec< () *ank error 3 C!eck o Cibo Co%pany (k) Cas! receipts use" or pay%ent (l) *ook errors (%,n) Custo%er c!eck (P$53P15) 2isb c!eck (P#,'503P#'5) *alances per books
11#0 1$,010
4eceipts '81,060
',6$0
(',6$0) #,110
($,'0)
(1,'00)
1,'00 (1,00)
(1,050) (;00) 650
'6;,5$0
(#,160)
(1,00) ;50 ($0)
$0
(800)
800
(;00) (',010) 650
',010
(#00) 1#,';0
1'#1 1;,#0
#,110 ($,'0) #,160
;50
1,050
2isb< 37.04./
',;'5 '6$,#5
(#00) (',;'5) 18,1;5
PROBLEM NO. 8 3 Cebu Co%pany C,-$ C&'()*+ Proo o Cas! 3 *ook to *ank Met!o" For t!e %ont! o 2ece%ber, '01'
*alances per books (refer to requirement ,a) 2eposits in transit (b) 7ove%ber #0 2ece%ber #1 .utstan"ing c!ecks (c,) 7ove%ber #0 2ece%ber #1 (P#,860 3 P600) *ank collections not in books (") 7ove%ber #0 2ece%ber #1 *ank service c!arges not in books (e) 7ove%ber #0 2ece%ber #1 2-F c!ecks 4eturne" in 2ec<, not recor"e" (!) 4eturne" in 7ov<, recor"e" in 2ec< (i) 4eturne" an" recor"e" in 2ec< () *ank error 3 C!eck o Cibo Co%pany (k) Cas! receipts use" or pay%ent (l) *ook errors (%,n) Custo%er c!eck (P$53P15) 2isb c!eck (P#,'503P#'5) *alances per bank (a,g)
11#0 1#,';0 (',6$0)
4eceipts '6;,5$0 ',6$0 (#,110)
$,'0
1,'00
(1,'00) 1,00
1,050 ;00 (650)
'81,060
#,160
1,00 (;50) $0
($0)
800
(800)
;00 ',010 (650)
#00 1$,010
1'#1 18,1;5
(#,110) $,'0 (#,160)
(;50)
(1,050)
2isb< 374065.
(',;'5) '65,$50
(',010)
#00 ',;'5 1;,#0
PROBLEM NO. 8 3 Cebu Co%pany C,-$ C&'()*+ Proo o Cas! 3 "uste" *alance Met!o" For t!e %ont! o 2ece%ber, '01'
*alances per bank (a,g) 2eposits in transit (b) 7ove%ber #0 2ece%ber #1 .utstan"ing c!ecks (c,) 7ove%ber #0 2ece%ber #1 (P#,860 3 P600) *ank error 3 C!eck o Cibo Co%pany (k) Cas! receipts use" or pay%ent (l)
*alances per books *ank collections not in books (") 7ove%ber #0 2ece%ber #1 *ank service c!arges not in books (e) 7ove%ber #0 2ece%ber #1 2-F c!ecks 4eturne" in 2ec<, not recor"e" (!) 4eturne" in 7ov<, recor"e" in 2ec< (i) 4eturne" an" recor"e" in 2ec< () *ook errors (%,n) Custo%er c!eck (P$53P15) 2isb c!eck (P#,'503P#'5)
11#0 1$,010
4eceipts '81,060
',6$0
(',6$0) #,110
($,'0)
#,110
(#,160) ',010
650 1',$;0
'8',1;0
'6#,100
'1,580
1#,';0
'6;,5$0
'6$,#5
18,1;5
1,'00
(1,'00) 1,00
(;50)
(1,050)
1,050 ;00
1,00 &1 (;50) $0
($0) &1 3
800
(800) &1 5
;00
#00 (',;'5) '8',1;0
Adjusting journal entries:
1,00 1,00
') *ank service c!arge Cas! in bank
$0
#) ccounts receivable Cas! in bank
800
$) Cas! in bank ccounts receivable
#00
5) Cas! in bank ccounts payable
1'#1 1;,#0
($,'0) #,160 (',010) 650
1',$;0
1) Cas! in bank 7ote receivable
2isb< 37.04./
$0
800
#00 ',;'5 ',;'5
'6#,100
#00 &1 4 ',;'5 &1 . '1,580
PROBLEM NO. 3 M=M Co%pany
MQM C&'()*+ Proo o Cas! 3 *ank to *ook Met!o" For t!e %ont! o 2ece%ber, '01' 7ov< #0 /na"uste" bank balances /n"eposite" receiptsA 7ove%ber 2ece%ber .utstan"ing c!ecksA 7ove%ber 2ece%ber rroneous bank "ebit Pay%ent to cre"itor in cas! 7+F c!ecksA 4eturne", recor"e" in 2ece%ber 4eturne", recor"e" in ?anuary /nrecor"e" bank collectionsA 7ove%ber 2ece%ber *ank service c!argesA 7ove%ber 2ece%ber *ook error in 2ece%ber /na"uste" book balances
'15,00 ;0,00
2ece%ber 4eceipts 2isb< 303/40.// (;0,00) 101,'00
(',650)
1',100 (10,$00)
(1'1,500)
',''1,;00
'#0,$00
101,'00 (',650) 1$,#00 (;,500) 1',100 (10,$00) (8,00)
1'1,500 (11,$00)
6,500
15,$50
',18;,600
2ec< #1
(1$,#00) ;,500
8,00
(11,$00) 6,500 ($,'00) (#,00) ',10,550
$,'00 #,00 '',800
PROBLEM NO. 3 M=M Co%pany
MQM C&'()*+ Proo o Cas! 3 *ook to *ank Met!o" For t!e %ont! o 2ece%ber, '01' 7ov< #0 /na"uste" book balances /n"eposite" receiptsA 7ove%ber 2ece%ber .utstan"ing c!ecksA 7ove%ber 2ece%ber rroneous bank "ebit Pay%ent to cre"itor in cas! 7+F c!ecksA 4eturne", recor"e" in 2ece%ber 4eturne", recor"e" in ?anuary /nrecor"e" bank collectionsA 7ove%ber 2ece%ber *ank service c!argesA 7ove%ber 2ece%ber *ook error in 2ece%ber /na"uste" bank balances
2ece%ber 4eceipts 2isb<
15,$50
',''1,;00
(;0,00)
;0,00 (101,'00)
',650
(1',100) 10,$00
1'1,500
','0$,500
'',800
(101,'00) ',650 (1$,#00) ;,500 (1',100) 10,$00 8,00
(1'1,500) 11,$00
(6,500)
'15,00
',10,550
2ec< #1
1$,#00 (;,500)
(8,00)
11,$00 (6,500) $,'00 #,00 ',18;,600
($,'00) (#,00) '#0,$00
PROBLEM NO. 3 M=M Co%pany
MQM C&'()*+ Proo o Cas! 3 "uste" *alance Met!o" For t!e %ont! o 2ece%ber, '01' 7ov< #0 /na"uste" bank balances /n"eposite" receiptsA 7ove%ber 2ece%ber .utstan"ing c!ecksA 7ove%ber 2ece%ber rroneous bank "ebit Pay%ent to cre"itor in cas! "uste" bank balances /na"uste" book balances 7+F c!ecksA 4eturne", recor"e" in 2ece%ber 4eturne", recor"e" in ?anuary /nrecor"e" bank collectionsA 7ove%ber 2ece%ber *ank service c!argesA 7ove%ber 2ece%ber *ook error in 2ece%ber "uste" book balances
'15,00 ;0,00
2ece%ber 4eceipts 2isb< 303/40.// (;0,00) 101,'00
(',650)
') Cas! in bank 7ote receivable
'#0,$00
101,'00
'6;,$50
1',100 ',''6,'00
(',650) 1$,#00 (;,500) 1',100 ',16;,850
#',800
15,$50
',''1,;00
306/0../
'',800
10,$00
10,$00 8,00
1'1,500
(1'1,500) 11,$00
(6,500)
'6;,$50 3
',''6,'00 3
Adjusting journal entries:
1) ccounts receivable Cas! in bank
',18;,600
2ec< #1
8,00 8,00 11,$00 11,$00
#) *ank service c!arge Cas! in bank
$,'00
$) ccounts payable Cas! in bank
#,00
$,'00
#,00
(1$,#00) ;,500
(8,00) &1
11,$00 &1 3 (6,500) $,'00 #,00 ',16;,850 3
($,'00) &1 5 (#,00) &1 4 #',800 3
PROBLEM NO. 1! 3 *a!t Co%pany B)/ C&'()*+ Proo o Cas! 3 *ank to *ook Met!o" For t!e %ont! o 2ece%ber, '01' 7ov< #0 /na"uste" bank balances "" ("e"uct) a"ust%entsA Custo%ers9 note collecte" by bank 7ove%ber *ank service c!arges 7ove%ber 2ece%ber rroneous bank "ebit37ove%ber /n"eposite" collections 7ove%ber 2ece%ber .utstan"ing c!ecks 7ove%ber 2ece%ber 7+F c!ecks 2ece%ber *ook errors in 2ece%ber /ncollecte" custo%er9s note treate" as receipts rror in recor"ing a c!eck (+* P;;0, 4 P;,;00) /na"uste" book balances
2ece%ber 4eceipts 2isb<
6,500
10$,000
('5,000)
'5,000
#00
51,000
#00 ($00)
2ec< #1 390.//
10,000
(10,000)
$00 3
'0,000
('0,000) .409//
.409//
($',500)
($',500) 9/049/ (,000)
,000
8,;10
#0,000 (8,;10)
101,800
1'1,$00
#0,000 #;,#00
18#,;00
(9/049/)
Computation of deposits in transit0 'ecember 5! 2eposit in transit, 7ov< #0 "" collections in 2ece%berA 2ece%ber book receipts @ess receipts not representing collections in 2ece%berA Custo%ers9 note collecte" by bank, 7ov< #0 7ote >it! t!e bank treate" as receipts Total @ess "eposits cre"ite" by t!e bank in 2ece%berA 2ece%ber bank receipts @ess receipts not representing "epositsA rroneous bank "ebit, 7ov
'0,000 18#,;00 '5,000 #0,000
55,000
1'8,;00 1$8,;00
10$,000 10,000
;$,000 5$,;00
$utstanding checks0 'ecember 5! .utstan"ing c!ecks, 7ov< #0 "" c!ecks issue" in 2ece%berA 2ece%ber book "isburse%ents @ess "isburse%ents not representing c!ecks or 2ece%berA *ook error (+* P;;0, 4 P;,;00) *ank service c!arge, 7ov
$',500 101,800 8,;10 #00
;,'10
;',5;0 1#5,0;0
51,000 ,000 $00
,$00
$$,00 ;0,$;0
PROBLEM NO. 1! 3 *a!t Co%pany B)/ C&'()*+ Proo o Cas! 3 *ook to *ank Met!o" For t!e %ont! o 2ece%ber, '01' 2ece%ber 4eceipts 2isb<
7ov< #0 /na"uste" book balances "" ("e"uct) a"ust%entsA Custo%ers9 note collecte" by bank 7ove%ber *ank service c!arges 7ove%ber 2ece%ber rroneous bank "ebit37ove%ber /n"eposite" collections 7ove%ber 2ece%ber .utstan"ing c!ecks 7ove%ber 2ece%ber 7+F c!ecks 2ece%ber *ook errors in 2ece%ber /ncollecte" custo%er9s note treate" as receipts rror in recor"ing a c!eck (+* P;;0, 4 P;,;00) /na"uste" bank balances
#;,#00
18#,;00
'5,000
('5,000)
(#00)
101,800
(#00) $00
2ec< #1 1'1,$00
(10,000)
10,000
($00) 3
('0,000)
'0,000 (.409//)
(.409//)
$',500
$',500 (9/049/) ,000
(,000)
(8,;10)
(#0,000) 8,;10
51,000
1';,500
(#0,000) 6,500
10$,000
9/049/
PROBLEM NO. 1! 3 *a!t Co%pany B)/ C&'()*+ Proo o Cas! 3 "uste" *alance Met!o" For t!e %ont! o 2ece%ber, '01' 2ece%ber 7ov< #0 4eceipts 2isb< /na"uste" bank balances "" ("e"uct) a"ust%entsA rroneous bank "ebit37ove%ber /n"eposite" collections 7ove%ber 2ece%ber .utstan"ing c!ecks 7ove%ber 2ece%ber
6,500
10$,000
10,000
(10,000)
'0,000
('0,000) .409//
($',500)
2ec< #1
51,000
390.// 3
.409// ($',500) 9/049/
(9/049/)
"uste" bank balances
$,000
1'8,;00
;8,;;0
;#,;10
/na"uste" book balances "" ("e"uct) a"ust%entsA Custo%ers9 note collecte" by bank 7ove%ber *ank service c!arges 7ove%ber 2ece%ber 7+F c!ecks 2ece%ber *ook errors in 2ece%ber /ncollecte" custo%er9s note treate" as receipts rror in recor"ing a c!eck (+* P;;0, 4 P;,;00)
5905//
18#,;00
101,800
1'1,$00
'5,000
('5,000)
"uste" book balances
$,000
(#00)
(#00) $00 ,000 (#0,000) (8,;10)
3
1'8,;00 3
Adjusting journal entries:
1) *ank service c!arge Cas! in bank
$00
') ccounts receivable Cas! in bank
,000
$00
,000
#) 7otes receivable Cas! in bank
#0,000
$) ccounts payable Cas! in bank
8,;10
#0,000
8,;10
;8,;;0 3
($00) &1 (,000) &1 3 (#0,000) &1 5 8,;10 &1 4 ;#,;10 3
PROBLEM NO. 11 3 Hangover Co%pany H)*0&,% C&'()*+ Proo o Cas! 3 *ank to *ook Met!o" For t!e %ont! o ?uly, '01' ?uly #0
4eceipts
/na"uste" bank balances 2irect "eposits ?une ?uly 7+F c!eck re"eposite" 3 ?uly *ook error 3 ?uly (+* P1,$;', 4 P1,000) *ank error 3 ?uly *ank service c!arges ?une ?uly -nterest earne" ?une ?uly *ook error 3 ?une (+* P;,850, 4 P8,;55) 2eposits in transit ?une ?uly .utstan"ing c!ecks ?une ?uly
,$05
6,800
(65)
65 (65) ($6')
/na"uste" book balances
',150
15
(#,05$)
2isb 66,#;5
($6') ($;') (#8)
$;' #8
15 (165)
165
#,05$ (#,10)
(#,10) 8;5
(#,15) ','#8
($,6$')
65,#0$
5,810
(65)
8;5 #,15
6#1
','#8 ($,6$') 5,856
(5,856)
66,150
0,#0$
PROBLEM NO. 11 3 Hangover Co%pany H)*0&,% C&'()*+ Proo o Cas! 3 *ook to *ank Met!o" For t!e %ont! o ?uly, '01' ?uly #0
4eceipts
/na"uste" book balances 2irect "eposits ?une ?uly 7+F c!eck re"eposite" 3 ?uly *ook error 3 ?uly (+* P1,$;', 4 P1,000) *ank error 3 ?uly *ank service c!arges ?une ?uly -nterest earne" ?une ?uly *ook error 3 ?une (+* P;,850, 4 P8,;55) 2eposits in transit ?une ?uly .utstan"ing c!ecks ?une ?uly
',150
65,#0$
65
(65) 65 $6'
/na"uste" bank balances
,$05
(15)
#,05$
2isb 66,150
$6' $;' #8
($;') (#8)
(15) 165
(165)
(#,05$) #,10
#,10 (8;5)
#,15 (','#8)
$,6$'
6,800
0,#0$
65
(8;5) (#,15)
6#1
(','#8) $,6$' (5,856)
5,856
66,#;5
5,810
PROBLEM NO. 11 3 Hangover Co%pany H)*0&,% C&'()*+ Proo o Cas! 3 "uste" *alance Met!o" For t!e %ont! o ?uly, '01' ?uly #0
4eceipts
2isb
/na"uste" bank balances 2eposits in transit ?une ?uly .utstan"ing c!ecks ?une ?uly 7+F c!eck re"eposite" 3 ?uly *ank error 3 ?uly
,$05
6,800
#,15
(#,15) ','#8
"uste" bank balances
$,81;
65,$10
66,5'
',566
/na"uste" book balances 2irect "eposits ?une ?uly *ank service c!arges ?une ?uly -nterest earne" ?une ?uly *ook errors ?une (+* P;,850, 4 P8,;55) ?uly (+* P1,$;', 4 P1,000)
',150
65,#0$
66,150
0,#0$
65
(65) 65
"uste" book balances
$,81; 3
($,6$') ($6')
(15)
#,05$
($,6$') 5,856 ($6') (#8)
$;'
65
') *ank service c!arge Cas! in bank
165
65 165 #,10 #,10
$) 4ent epense Cas! in bank
8;5
5) Iages epense Cas! in bank
$;'
8;5 $;'
#8
(165) &1 3
#,10 &1 5
(8;5)
1) Cas! in bank 4ent inco%e
(5,856)
65 &1
(#,05$) #,10
65,$10 3
5,810
','#8
(15) 165
Adjusting journal entries:
#) Cas! in bank -nterest inco%e
66,#;5
6#1
66,5' 3
(8;5) &1 4 ($;') &1 . ',566 3
PROBLEM NO. 12 " Celtics Corporation +equirement *o, Total "eposits per bank state%ent in ?une 7ote collecte" by bank in ?uly 2eposits in transit, ?une #0 2eposits in transit, ?uly #1 Cas! receipts per books in ?uly
;,000,000 ('00,000) ($00,000) 1,000,000 ;,$00,000
+equirement *o, 3 Total "isburse%ents per bank state%ent in ?une ?uly 7+F c!eck ?uly service c!arge .utstan"ing c!ecks, ?une #0 .utstan"ing c!ecks, ?uly #1 Cas! "isburse%ents per books in ?uly
6,000,000 (1$0,000) (10,000) (;00,000) 00,000 ,550,000
+equirement *o, 5 *alance per books, ?une #0, '006 ?uly receipts per books (see no< '1) ?uly "isburse%ents per books (see no< '') *alance per books, ?uly #1, '006 +equirement *o, 4 *alance per bank state%ent, ?uly #1 (P#MP;M3P6M) 2eposits in transit, ?uly #1 .utstan"ing c!ecks, ?uly #1 "uste" bank balance, ?uly #1 *alance per books, ?uly #1 7ote collecte" by bank in ?uly 7+F c!eck *ank service c!arges "uste" book balance, ?uly #1
',500,000 ;,$00,000 (,550,000) 5,#50,000
5,000,000 1,000,000 (00,000) 5,$00,000 5,#50,000 '00,000 (1$0,000) (10,000) 5,$00,000
PROBLEM NO. 4 3 +yria Co%pany S+%) C&'()*+ Proo o Cas! 3 *ank to *ook Met!o" For t!e %ont! o 2ece%ber, '01'
7ov< #0 /na"uste" bank balances $80,000 /n"eposite" collectionsA 7ove%ber #0 100,000 2ece%ber #1 .utstan"ing c!ecksA 7ove%ber #0 (150,000) 2ece%ber #1 2-F c!ecksA 4eturne" in 7ov<, recor"e" in 2ec< 10,000 4eturne" an" recor"e" in 2ec< 4eturne" in 2ec<, recor"e" in ?an< rroneous bank "ebit /nrecor"e" bank collection in 2ec< nticipate" loan procee"s ro% 4 !ypot!ecation 7ov< #0 sales (P180,000 80) 1$$,000 2ec< #1 sales (P'00,000 80) 2eposits >it! loan pay%ent (P6'5,000 80) nticipate" loan pay%ent ro% un"eposite" collections 7ov< #0 (P100,000 80) (80,000) 2ec< #1 (P1$0,000 80) -nterest c!arge or bank loan in 2ec< /na"uste" book balances
50$,000
2ece%ber 4eceipts 2isb '$0,000
5//0///
(100,000) 1$0,000
('5,000) (';,000) (;0,000)
(10,000) (1$$,000) 10,000 580,000
6#5,000
$'0,000
1$0,000 (150,000) 1'0,000
(10,000) ('5,000)
2ec< #1
(1'0,000)
';,000 ;0,000 (10,000)
10,000 580,000 (80,000) 11',000 (#8,000)
(11',000) #8,000
600,000
5#;,000
PROBLEM NO. 4 3 +yria Co%pany S+%) C&'()*+ Proo o Cas! 3 "uste" *alance Met!o" For t!e %ont! o 2ece%ber, '01' 2ece%ber 4eceipts 2isb
7ov< #0 /na"uste" bank balances $80,000 /n"eposite" collectionsA 7ove%ber #0 100,000 2ece%ber #1 .utstan"ing c!ecksA 7ove%ber #0 (150,000) 2ece%ber #1 rroneous bank "ebit 2eposits >it! loan pay%ent (P6'5,000 80) "uste" bank balances $#0,000 /na"uste" book balances 50$,000 2-F c!ecksA 4eturne" in 7ov<, recor"e" in 2ec< (10,000) 4eturne" an" recor"e" in 2ec< 4eturne" in 2ec<, recor"e" in ?an< /nrecor"e" bank collection in 2ec< nticipate" loan procee"s ro% 4 !ypot!ecation 7ov< #0 sales (P180,000 80) (1$$,000) 2ec< #1 sales (P'00,000 80) nticipate" loan pay%ent ro% un"eposite" collections 7ov< #0 (P100,000 80) 80,000 2ec< #1 (P1$0,000 80) -nterest c!arge or bank loan in 2ec< "uste" book balances
$#0,000 3
'$0,000
2ec< #1
5//0///
(100,000) 1$0,000
1$0,000
580,000 80,000
(150,000) 1'0,000 (;0,000) 580,000 60,000
6#5,000
600,000
10,000 '5,000
$'0,000
'5,000 ';,000
(1'0,000) ;0,000 5#0,000 5#;,000
10,000
(';,000) 10,000
1$$,000 (10,000)
(10,000)
80,000 3
80,000 (11',000) #8,000
11',000 (#8,000)
60,000
5#0,000
3
3
PROBLEM NO. 14 3 7oel Co%pany +equirement ,a 2eposits in transit, 7ov< #0 "" collections in 2ece%berA 2ece%ber book receipts Custo%ers9 note collecte" by bank in 7ov< Total @ess "eposits cre"ite" by t!e bank in 2ece%berA 2ece%ber bank receipts 7+F c!eck re"eposite" (Custo%er ) 2eposits in transit, 2ec< #1
#5,000 ;#,'#0 ('0,000)
;$1,010 (#,'60)
;$#,'#0 ;68,'#0
;#6,6$0 $0,$;0
+equirement ,b .utstan"ing c!ecks, 7ov< #0 "" c!ecks issue" in 2ece%berA 2ece%ber book "isburse%ents Collection ee or note collecte" in 7ov< Total @ess c!ecks pai" by t!e bank in 2ece%berA 2ece%ber bank "isburse%ents *ank error in c!eck pay%ent (P1,#$0 3 P#$0) 7+F c!eck 3 Custo%er 7+F c!eck 3 Custo%er * .utstan"ing c!ecks, 2ec< #1
88,'$0 1,008,$80 (80)
1,010,$10 (1,000) (#,'60) (,6#0)
1,008,$00 1,0;,$0
;;;,$10 ;6,'#0
+equirement ,c 2eposits in transit, 2ec< #1 (see 4equire%ent 1
$0,$;0 ';',500 ,6#0
#'1,$;0 (1,000)
';;,'#0 ##;,6'0
#'0,$;0 1;,'#0
+equirement ,d .utstan"ing c!ecks, 2ec< #1 (see 4equire%ent 1
7ov< #0 /na"uste" bank balances #$$,$'0 2eposits in transitA *eginning o perio" #5,000 n" o perio" .utstan"ing c!ecksA *eginning o perio" (88,'$0) n" o perio" *ank error in c!eck pay%ent 7+F c!eck re"eposite" (Custo%er ) "uste" bank balances ';1,180 /na"uste" book balances '61,'0 7ote collecte" by bank in 7ov< 1;,;'0 7+F c!eck not re"eposite" (Custo%er *) /nrecor"e" payroll in ?an
;6,'#0 166,560 5,500
2ece%ber 4eceipts 2isb ;$1,010
1,010,$10
(#5,000) 4/049/
(#,'60) ;$#,'#0 ;#,'#0 ('0,000)
(88,'$0) 97035/ (1,000) (#,'60) 1,015,1#0 1,008,$80 (80) ,6#0
18#,060 '80,#00 '#0,180 50,1'0
2ec< #1
?anuary 131' 4eceipts 2isb
'65,0'0
#'1,$;0
4/049/
($0,$;0) 1;,'#0
'#0,180
?an< 1' #,##0
1;,'#0 (;6,'#0) 50,1'0
(50,1'0)
';;,'#0
18#,060
##5,$$0
'',010
';',500
166,560
#$0,;$0
(,6#0)
,6#0 5 500
(5 500)
(97035/) 1,000
(1,000)
'1;,'80
"uste" book balances
';1,180 3
;$#,'#0 3
1,015,1#0 3
'1;,'80 3
';;,'#0 3
18#,060 3
##5,$$0 3
PROBLEM NO. 15 3 T!eory 1C 'C #* $ 5 * 6* 82 ;* 10 * 11 * 1' *
