On December 31, 2015, Margaux Company’s cash and cash equivalents account balance were composed of the following items: Cash on hand P 300,000
Petty cash fund 50,000 HSBC current account 2,000,000 BPI current account 950,000 SBC, current account (60,000) PNB, 60-day time deposit 200,000 The examination of the above mentioned items revealed the following:
The cash on hand account includes a customer’s check of P60,000 dated January 2, 2016 and a P45,000 postal money order
The petty cash fund includes unreplenished vouchers for P12,000, employee check of P8,000 dated January 15, 2016 and a P5,000 company check bearing the name of the petty cash custodian. Included among the checks drawn by Margaux Company against its HSBC current account and recorded in December 2015 are: Check No. 1001208001 written and dated December 23, 2015 which was delivered to the o payee on January 6, 2016, P130,000 Check No. 1001255001 written December 28, 2015 and dated Janua ry 12, 2016 which was o handed to the payee on December 29, 2015, P270,000 The BPI current was composed of the following items: Current account No. 2908356 P1,195,000 Current account No. 2908357 (245,000) The amount to be reported as cash at December 31, 2015 is
1. The following is available for Kiwi Company on August 31:
Ledger balance, August 31, P346,000 Note including interest of P700 collected by the bank and no yet taken u in the books, P9,500
NSF checks returned with the bank statement, P12,500
Deposit in transit as of August 31, P47,000
Outstanding checks as of August 31, P29,000
Bank service charge for August, P625
Deposit made by Kiwi Company’s collector was erroneously credited to Kitty Company by
the bank, P9,200
Check drawn against the account of Key Company was erroneously debited against Kiwi Company’s account by the bank, P16,200 Customer’s deposits as reflected in the bank statement P7,000 was recorded in the books
as P700 Check to suppliers for P1,350 was recorded in the books as p13,050 The unadjusted cash balance per bank statement on August 31 is
The cash account of Dolly Inc. disclosed a balance of P17,056.48 on October 31. The bank statement as of October 31 showed a balance of P21,209.45. Upon comparing the bank statement with the cash records, the following facts were developed. a.
Dolly’s account was charged on October 26 for a customer’s uncollectible check amounting to P1,143. b. A 2-month, 9%, P3,000 customer’s note dated August 25, discounted on Octob er 12, was dishonored October 26 and the bak charged dolly P3,050.83, which included a protest fee of P5.83.
c.
A customer’s check for P725 was entered as P625 by both the depositor and the bank but was later corrected by the bank.
d. Check no. 661 for P1,242.50 was entered in the cash disbursements journal as P1,224.50 and check no. 652 for P32.90 was entered as P329.00. the company uses the voucher system. e. Bank service charges od P39.43 for October were not yet recorded on the books. f. A bank memo started that M. Sin’s note for P2,500 and interest of P62.50 had been collected on October 29, and the bank charged P12.50 (No entry was made on the books when the note was sent to the bank for collection). g. Receipts of October 29 for P6,850 were deposited on November 1. The following checks were outstanding on October 31: No. 620 ……………………………………………..P1,250.00 No. 621 …………………………………………….. 3,448.23 No. 632 …………………………………………….. 2,405.25 No. 670 …………………………………………….. 1,775.38
No. 671 ……………………………………….P 732.50 No. 673 ………………………………………. 187.90 No. 675 ………………………………………. 275.72 No. 676 ………………………………………. 2,233.15
Prepare the bank reconciliation as of October 31 to show the adjusted cash b alance.
Ilang-ilang Company keeps all its cash in a checking account. Presented below are the company’s bank reconciliation prepared at the end of May, the general ledger for cash, and a summary of the company’s bank statement for June:
Balance per bank statement Add: Deposit in transit Deduct: Outstanding checks Correct cash balance
P6,250 225 6,475 418 P6,057
Balance per books Deduct: Bank service charge
P6,072 15
Correct cash balance
P6,057
Balance, June 1 Deposits shown for June Note and interest collected during June Checks that cleared during June June service charge Balance, June 30
P6,250 25,692 1,575 (25,707) (17) 7,793
Additional information: 1. During June, iIlang-ilang incorrectly recorded two checks. Check no. 507 ws drawn for P233 but recorded as P323; check no. 521 was d rawn for P180 but recorded as P18. Both checks were issued in payment of accounts payable and cleared the bank in June. 2. During June the bank erroneously charged a P210 check of Ilong-ilong Company to Ilang-ilang Company’s account. 3. Of the P1,575 note and interest collected by the bank suring June, P75 represents interest, all of which Ilang-ilang earned during the current year. The company has not yet recorded the collection. Required: 1. Prepare a June 30 bank reconciliation. 2. Prepare journal entries to bring Ilang-ilang Company’s accounting records up to date. 3. What amount should Ilang-ilang report as cash on the balance sh eet dated June 30?
Mila Lim is the cashier of the Plaridel Glass Company. As representative of the Reyes, Tan and Associates, CPAS, you were assigned to verify her cash on hand in the morning of January 4, 2012. You began to count at 9:00 AM in the presence of Miss Lim. In the course of your counting, you found currencies in paper bills and coins together with checks, vouchers and other items, which are mentioned below: Bills
2 fifties, 9 twenties, 13 tens Coins
P5.00 1.00 0.25 0.10 0.05 Checks
5 loose 74 loose 5 rolls and 32 loose 10 rolls and 15 loose 16 rolls and 9 loose
(50 pieces to a roll) (50 pieces to a roll) (40 pieces to a roll)
Jose Cruz, Asst. Manager Mila Lim, Cashier
12/23/11 12/26/11
A. David, janitor R. Tirao, clerk Pedro Munar, bookkeeper
12/20/11 12/22/11 12/24/11
Plaridel Glass Co. Plaridel Glass Co.
P60.00 40.00
IOUs
P35.00 25.00 15.00
PettycashVouchersforreplenishment
L. Bilbao, messenger Rosario & Co. Victory liner Bureau of posts (stamps) A. Vallo, carpenter B. Tello
12/16/11 12/17/11 12/18/11 12/18/11 12/20/11 12/21/11
Advances to employees Supplies Freight in Supplies Repairs Miscellaneous exp.
P10.00 14.50 18.25 30.00 45.00 15.40
Your investigation also disclosed the following: 1. The balance of petty cash fund per books is P900 2. Cash sales of January 2, 2012 amounted to P865 per sales records, while Cash Receipts Book and Deposit Slip showed that only P765 was deposited in the bank on January 3, 2012. 3. The following employees’ pay envelopes had been ope ned and the money removed. Each envelope was marked “unclaimed”. N. Roy P33.25 G. Gloria 24.75 Required: 1. Prepare the necessary adjusting journal entries. 2. What is the total amount of petty cash fund to be accounted for? 3. What is the correct total amount of fund per count? 4. Compute for the cash shortage.
In your year-end audit of J.P. Rizal Corporation, the cashier showed a cash accountability of P12,000 as at December 31, 2013. Selected transactions of the corporation for 2012, in summary form, follows: Accounts written off Depreciation of fixed assets Disbursements for cost and expenses Income tax accrued Payment of bank loan Subscriptions receivable Subscribed share capital Proceeds from short term bank loan Purchased of fixed assets
P
5,000 30,000 750,000 10,000 40,000 300,000 900,000 100,000 450,000
Sales (80% collected in 2012)
700,000
Compute for the Cashier’s correct cash accountability at December 31, 2012.
The Silver Company’s internal control over its cash transactions is very weak. Actually, the company’s cash position at December 31, 2012 were as follows: The cash book showed a balance of P15,000, which included cash on hand. A credit of P150 on the bank’s records did not appear on the company’s book s. The bank statement shoed a balance of P12,300; and the
outstanding checks were: 0100 – P120; 0201 – P100; 0300 – P230; 1501 – P110; 1510 – P140 and 1515 – P150. The cashier removed all of the cash on hand in excess of P3,000 and then prepared the following reconciliation: Balance per books, Dec. 31, 2012 Add: Outstanding checks: No. 1501 1510 1515 Deduct – cash on hand Balance per bank, Dec 31, 2012 Deduct – unrecorded credit True cash, Dec 31, 2012
P15,000 P110 140 150
300 P15,300 3,000 P12,300 150 P12,150
Required: 1. Compute for the cash shortage if any 2. Compute for cashier’s accountability 3. Compute for the adjusted cash in bank balance in the balance sheet
On January 10, 2013, you started the audit of the financial records of the De Leon Company for the year ended December 31, 2012. From your investigation, you discovered the following: 1. The bookkeeper acts also as the cashier. Her December 31, 2012 year-end cash reconciliation contained the following items: Cash per ledger, 12-31-12 P61,400 Cash per bank, 12-31-12 64,850 Checks outstanding 5,220 Vendoro Co. check charged by bank in error 12-20-12; corrected 150 by bank on 1-5-13 Cash in transit, credited by bank on 1-2-13 720
2. The cash account balances per ledger as of 12-31-12 were: Cash – P61,400, petty cash – P150. 3. The count of the cash on hand at the close of business on January 10, 2013, including the petty cash, was as follows: Currency and coin P385 Expense vouchers 20 25 Employees’ IOU’s dated 1 -5-13 290 Customer’s checks in payment of acct P750 4. From January 2, 2013 to January 10, 2013, the date of your cash count, total cash receipts appearing in the cash records were P8,600. According to the bank statement for the period January 2 to January 10, 2013, total deposits were P7,600. 5. On July 5, 2012, cash of P400 was received on account from a customer; the Allowance for doubtful account was charged and Accounts receivable was credited. 6. On December 5, 2012, cash of P300 was received on account from a customer, inventory was charged and Accounts receivable was credited. 7. Cash of P730 received during 2012 was n ot recorded. 8. Checks received from customers from January 2, 2013 to January 10, 2 013, totaling P420, were not recorded but deposited in the bank. 9. On July 1, 2012, the bank refunded interest of P20 because a note of the De Leon Company was paid before maturity. No entry had been made for the refund. 10. In the cashier’s petty cash, there were receipts for collections from customers on January 9, 2013, totaling P850; these were unrecorded and undeposited. 11. In the outstanding checks, there is one for P50 made payable to a trade creditor; investigation shows that this check had been returned on June 14, 2013 and a new check was issued in its place; the original check for P50 was made in e rror as to amount.
Required: 1. Compute the correct bank balance as of December 31, 2012. 2. Compute the cash shortage as of December 31, 2012. 3. Compute the cash shortage for the period January 1 to January 10, 2013.
From the following information, prepare a four-column reconciliation of receipts, disbursements and balances for Panay Company, using the form where the ba nk and book balances are brought to a corrected cash balance:
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16.
Balance per bank P14,010 P19,630 Balance per books 11,190 18,945 Deposit in transit 2,740 3,110 Outstanding checks 4,260 3,870 Bank collections not in books 1,200 1,600 Bank charges not in books 950 640 Of the checks outstanding in September 30, one check for P700 was certified at the request of the payee. Deposits for September, per bank statement, P281,070. September disbursements, per cash journal, P273,885. NSF check from customer was charged by the bank on September 28, and has not been redeposited, P800. NSF check in August and recorded in September, P1,050. NSF check returned and recorded in September, 900. Check of Pasay Company charged by bank in error, P2,010. Receipt on September paid out in cash for travel ex penses, P750. Error in recording customer’s check, September 20; P165 instead of P465. Error in disbursement journal for September, P3,250 instead of P325.
Also prepare adjusting journal entries for the a ccounts of Panay Company at September 30.
