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Use the following information for the next 2 questions:
- For the year ended December 31, 2023, Agaton Co. initially reported P3,000,000 cash. Included in this amount were the following checks from customers: a) Check amounting to P100,000 and dated December 25, 2023 was received last December 1, 2023. b) Check amounting to P300,000 and dated January 7, 2024 was received last December 10, 2023. c) Check amounting to P300,000 and dated November 8, 2023 was received last December 10, 2023. d) Check amounting to P300,000 and dated February 9, 2024 was received last November 17, 2023. Compute the adjusted amount of cash to be reported by Agaton. Solution: Cash reported 3,000, a) - b) (300,000) c) - d) (300,000) Adjusted 2,400, Concept: post-dated check received
- What if instead, none of these checks were initially included in the P3,000,000 balance? Compute the adjusted amount of cash to be reported by Agaton. Solution: Cash reported 3,000, a) 100, b) - c) 250, d) - Adjusted 3,350, Concept: post-dated check received
- As of December 31, 2023, Bisaya Co’s cash in bank account showed an unadjusted balance of P4,500,000. Other relevant data pertaining to company’s issued checks are the following: a) Check amounting to P175,000 and dated December 29, 2023 was deducted from the balance. b) Check amounting to P235,000 and dated January 9, 2024 was deducted from the balance. c) Check amounting to P105,000 and dated January 15, 2024 was still included in the balance. Determine the adjusted amount of cash to be reported. Solution: Cash reported 4,500, a) - b) 235, c) Adjusted 4,735, Concept: post-dated check issued
- Caloy-I Co. has the following information with regards to some of the checks it written during 2023, all of which are dated 2023:
a) Check amounting to P160,000 was delivered to payee on January 29, 2024. This was deducted from the cash in bank balance. b) Check amounting to P90,000 and dated December 10, 2023 was delivered to payee on December 29, 2023. The payee is yet to encash the check to the bank. This was deducted from the cash in bank balance. c) Check amounting to P315,000 was delivered to payee on January 2, 2024. This was not deducted from the cash in bank balance. Before considering the preceding items, the company reported P2,500,000 cash in the bank balance. Compute the adjusted cash in bank balance that should be reported. Solution: Cash reported 2,500, a) 160, b) c) Adjusted 2,660, Concept: unreleased check Use the following information for the next 2 questions:
- Estoy Co. maintains the following bank accounts: Checking account No. 00023, Alpha Bank 500, Checking account No. 00024, Alpha Bank (120,000) Saving account No. 40021, Omega Bank (250,000) Compute the amount of cash in bank to be reported by Estoy Co. Solution: 500 – 120 = 380; 250 reported as current liability.
- Compute the amount of cash in bank to be reported by Estoy Co, assuming that the bank overdraft is part of the company’s cash management. Solution: 500 – 120 – 250 = 130. As a rule, report the overdraft as current liability unless the overdraft is part of cash management, offset it with other bank accounts.
- As of December 31, 2022, Himala Co. reported the following unadjusted general ledger balance: Cash on hand 1,500, Petty cash fund 60, Cash in bank 6,000, Cash funds 5,000, Cash equivalents 7,000, Total cash and cash equivalents 19,560, Other data regrading these balances are the following: a) Included in the cash on hand are the following checks: i. Customer check amounting to P200,000 dated January 31, 2023. (-200,000 PDC) ii. Customer check amounting to P100,000 dated February 14, 2022. (-100,000 STALE CHECK) b) Based on the inspection on the petty cash fund, coins and currency amounted to P20,000, while the remaining P40,000 are in the form of petty cash vouchers. (for audit trail) c) Cash in bank included the following items: Checking account No. 1, ETA Bank 4,000, Checking account No. 2, ETA Bank (1,000,000) Checking account No. 1, GAMMA Bank (3,000,000)
Balance in CC savings account 342, Customer’s postdated check 54, Employee travel advances 64, Cash in bond sinking fund 48, Bond sinking fund investments 323, Postage stamps 17, Compute the total amount as cash at December 31, 2024. Solution: Cash on hand (undeposited sales receipts) 40, Reconciled balance in BB Bank checking account 374, Balance in CC savings account 342, Total cash 757,
- The controller of the Loderico Co. is trying to determine the amount of cash and cash equivalents to be reported on its December 31, 2024, balance sheet. The following information is provided: Balances in the company’s accounts at the Monte Bank: Checking account 540, Savings account 884, Undeposited customer checks 208, Currency and coins 23, Savings account at the Cavite Bank with a balance of P350,000. This account is being used to accumulate cash for future plant expansion in 2026. P800,000 balance in a checking account at the Cavite Bank. In exchange for a line of credit, Loderico Co. has agreed to maintain a minimum balance of P100,000 in this account. Compute the total cash and cash equivalents. Solution: Balances in the company’s accounts at the Monte Bank: Checking account 540, Savings account 884, Undeposited customer checks 208, Currency and coins 23, Checking account in Cavite Bank 800, Treasury bills with 30-day maturity 600, Total cash and cash equivalents. 3,055,
- Alemania Co’s accounting manager wants to compute for the adjusted cash in bank balance by using the balance per bank statement, which amounted to P3,400,000. The bank statement showed a bank loan proceeds of P2,000,000 and bank service charge of P8,000. In addition, an NSF check amounting to P90,000 was returned together with the bank statement. Upon comparing the deposits made with the deposits acknowledged in the bank statement, the accounting manager noted that a total of P280, deposits are yet to be acknowledged by the bank. In the same way, the accounting manager noted that a total P640,000 issued checks are not yet encashed by the payees. However, P140,000 of these checks were already certified by the bank. Compute the adjusted cash in bank balance. 3,180, Solution: Book Bank Unadjusted balance (squeeze) 1,350,000 3,400, Proceeds of bank loan 2,000, Bank service charge (8,000) NSF (90,000) DIT 280, OC (640 – 140) (500,000)
Adjusted balance 3,180,000 3,180,
- Compute the unadjusted cash balance per book. 1,350,
- When preparing the current month’s bank reconciliation, the accountant of Caldo Co. noted that there were no deposits in transit, outstanding checks, debit memos and credit memos. Instead, the recording of the company and the bank is plagued by the following errors: a. A check correctly written for P78,000 was recorded by the company as P87,000. b. A deposit P100,000 was recorded by the bank as P10,000. c. A check for P250,000 was not recorded by the company. d. A deposit of Cipriano Co. (an unrelated entity) amounting to P320,000 was recorded by the bank in Caldo Co.’s bank account. e. A check of the company amounting to P140,000 was recorded by the bank as Cipriano’s. f. Deposit of P150,000 was recorded by the company as P15,000. Unadjusted balance per books is P2,706,000 and per bank statement is P2,970,000. Compute the adjusted cash in bank balance. Solution: Book Bank Unadjusted balance 2,706,000 Unadjusted balance 2,970, a) Overstated disbursements: (87,000 – 78,000) 9,000 b) Understated bank credits (10,000 -100,000)
c) Unrecorded debit memo (250,000) d) Erroneous bank credits (320,000) f) Understated receipts: (15,000 – 150,000) 135,000 e) Unrecorded bank debits (140,000) Adjusted balance 2,600,000 Adjusted balance 2,600, Unadjusted balance (2,706,000) Unadjusted balance (2,970,000) Net credit (106,000) Net credit (370,000)
- Carlito Co. reported the following information: Balance per books 2,052, Balance per bank statement 4,000, NSF check 100, Deposits in transit 750, Bank service charge 15, Outstanding checks, including certified checks of P120,000 690, Proceeds of bank loan 2,000, Note receivable collected by the bank: Face amount 600, Interest income 30, Collection of service charge 5, Utilities paid by the bank on behalf of the company 70, A check of Camilo Co. was recorded by the bank as Carlito’s 250, A deposit of Carlito Co. was recorded by the bank as Camilo’s 170, Correct amount of the check that Carlito recorded as P110,000 11, Correct amount of the deposit that Carlito recorded as P89,000 98, Compute the adjusted amount of cash in bank. Solution: Book Bank Unadjusted balance 2,052,000 Unadjusted balance 4,000, NSF check (100,000) Deposits in transit 750,
Outstanding checks (with certified check of P100,000) 400, Deposits placed in the bank’s night depositary on September 30 600, Bank service charge 10, Proceeds of bank loan not recorded by Regidor 100, Customer’s check charged by the bank due to lack of counter signature 20, Amount erroneously credited by the bank to Regidor’s account 50, A supplier check for P10,000 was incorrectly recorded by Regidor as 100, Notes collected by the bank for Regidor 150, A customer check for P150,000 was incorrectly recorded by Regidor as 15, NSF checks not recorded on books nor redeposited 25, Check of Rigid Co. charged by the bank to Regidor Co. 60, Deposit of Regidor Co. credited by the bank to Rogelio Co. 100, Check issued by Regidor Co. charged by the bank to Remigio Co. 40, Compute the adjusted cash in bank balance.
- Compute the unadjusted balance per book. Solution: Book Bank Unadjusted balance 1,950,000 Unadjusted balance 2,000, BSC (Debit memo) (10,000) OC (400 – 100) (300,000) Proceeds of bank loan (Credit memo) 100,000 DIT 600, Defective checks (Debit memo) (20,000) Over receipt (50,000) Overpayment 90,000 Over disbursement 60, Note collected (Credit memo) 150,000 Under receipt 100, Under collection (150 – 15) 135,000 Under disbursement (40,000) NSF (Debit memo) * (25,000) Adjusted balance 2,370,000 Adjusted balance 2,370, *To be added to the book disbursements and deducted from book balance. No effect in the bank balance because it has been deducted in the bank statement both the bank receipt and the bank disbursement. Use the following information for the next 7 questions:
- Mamaradlo Co. provided the following bank reconciliation on August 31: Balance per bank statement 1,500, Deposits outstanding 300, Checks outstanding (180,000) Errors 70, Adjusted cash balance 1,690, Balance per ledger 1,575, Credit memos 250, NSF checks not recorded nor redeposited (90,000) Bank service charge (5,000) Errors (40,000) Adjusted cash balance 1,690, Information pertaining to August: a) Book errors comprised an over-recording of customer check of P100,000 and over-recording of disbursement of P60,000. b) Bank error was actually an erroneous debit in the account of the company. The following are data pertaining to September: Receipts per ledger 1,600,
Disbursement per ledger 700, Credit memos 150, NSF Checks redeposited immediately 50, NSF Checks not recorded nor redeposited 40, Outstanding checks 100, Deposit in transit 280, Bank service charge 10, Error in recording customer check amounting to P100,000 as 10, Deposit of Mamagsakay Co. credited to company’s account 110, Check issued by Mamaradlo Co. charged by Mamasapano Co. 60, Customer check amounting P15,000 recorded by Mamaradlo Co. as 150, Erroneous charge by the bank to Mamaradlo’s account amounting to 40, Adjusted cash in bank balance at the end of August.
- Adjusted cash receipts of September.
- Adjusted cash disbursements of September.
- Adjusted cash in bank balance at the end of September.
- Unadjusted balance per bank statement for September.
- Unadjusted bank receipts of September.
- Unadjusted bank disbursement of September. Solution: (August) (September) BOOK: Previous Receipts Disbursements Current UNADJUSTED BALANCE 1,575,000 1,600,000 700,000 2,475, Credit memo: LAST MONTH 250,000 (250,000) CURRENT MONTH 150,000 150, NSF: LAST MONTH (90,000) (90,000) CURRENT MONTH 40,000 (40,000) Service charge: LAST MONTH (5,000) (5,000) CURRENT MONTH 10,000 (10,000) UNDERRECEIPT: LAST MONTH CURRENT MONTH 9,000 9, OVERRECEIPT: LAST MONTH (100,000) (100,000) CURRENT MONTH (135,000) (135,000) UNDERDISBURSEMENT: LAST MONTH CURRENT MONTH OVERDISBURSEMENT: LAST MONTH 60,000 (60,000) CURRENT MONTH **Adjusted balance 1,690,000 1,395,000 555,000 2,530,
- 22)** (August) (September)
