Use the following information for questions 1 to 7
A. The following data pertains to the cash account of Bacoor Company.
Nov. 30 Dec. 31
Cash balance per bank statements P803,115 ?
Deposit in transit 65,100 120,450
Outstanding checks 72,400 66,320
Bank service charges 700 300
Notes Receivable collected by bank 280,310 309,440
NSF checks 12,500 19,600
The bank statement is dated December 31, and the company’s cash records
for the month of December showed the following information:
Checks and debit memos per bank statement P1,850,000
Cash receipts per ledger 2,106,620
Cash disbursements per ledger ?
Deposits and credit memos per bank 2,100,000
statement
Additional information:
a. A P45,000 bank credit error in November was corrected by the bank in
December.
b. The bank erroneously charged Bacoor P22,000 in December for a check issued
by Bacolor Corporation
c. A Collection of P 155,000 in November was erroneously recorded at P150,000.
The error was detected and corrected in December.
d. A receipt of P80,000 in November was erroneously recorded at P90,000. The
error was corrected in December.
e. A December collection from a customer amounting to P24,600 had been
erroneously credited to cash for P26,400.
1. What is the unadjusted cash balance per books of Bacoor Company at
1
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November 30?
2. What is the unadjusted cash balance per books on December 31?
3. What is the adjusted cash receipts per books in December?
4. What is the unadjusted cash disbursements per book in December?
5. What is the adjusted cash disbursements per book in December?
6. What is the adjusted cash balance on November 30?
7. What is the adjusted cash balance at Dec. 31?
Hint: Prepare a proof of cash to be able to answer the above questions.
B. ABC Trading maintains a checking account at Security Bank. The following data
was provided for the purpose of reconciling the cash balance per books and
the cash balance per bank for the month of December.
Balance per books P130,000
Outstanding checks (including a certified check of P20,000) 100,000
Deposit in transit 40,000
December NSF checks (P10,000 had been redeposited and
cleared on 12/27 30,000
Erroneous bank credit to ABC’s account 60,000
Proceeds of ABC’s bank loan, net of service charge of P5,000 150,000
8. What is the cash balance per bank statement at December 31?
C. On December 1, 2018, Potter Corporation established a petty cash fund of P5,000. On
December 31, 2018, the petty cash fund was examined and found to have receipts and
documents for various expenses amounting to P2,740 and a petty cash voucher for P1,250
signed by Alan Co, an employee as an IOU. In addition, there was cash amounting to P860.
Assuming that no replenishment was made at year end, what entry should be made to
adjust petty cash fund to its correct balance as at December 31, 2018?
D. On December 31, 2018, the cash account of Masagana Company showed a balance of
2
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P396,980. The bank statement on that date showed a balance of P415,000. Upon
examining the cash records and the bank statement, the following information were
determined.
a. There was a bank service charge of P 1,500 for the month of December
b. There was a credit memo for a note collected by the bank for Masagana. The customer’s note is
P90,000 with interest of P2,600. The bank charged a collection fee of P550
c. December 31, receipts for P289,000 were deposited only on January 2, 2019
d. Checks issued which have not yet cleared the bank as at December 31,2018 amounts to P186,610
e. There is a debit memo for P45,320 for a customer’s checked returned marked “DAIF”
f. A receipt of P90,000 had been entered as P60,000 in the cash book. Check # 12345 issued
amounting to P49,100 was erroneously recorded as P41,900 and check # 12346 issued in the
correct amount of P5,820 had been taken up as P58,200.
1. What is the correct amount of cash to be presented in December 31, 2018 financial
statements?
2. How much is the net adjustment to cash at December 31?
E. The following account balances are shown in the accounting records of Epal company:
Jan. 1, 2019 Dec. 31, 2019
Cash P21,000
Accounts Receivable 67,000 P91,000
Merchandise Inventory 86,000 78,000
Accounts Payable 53,000 48,000
Sales for 2019 amounted to P798,000 while Cost of Goods Sold was P583,000. Cash
operating expenses amounted to P107,000. All sales and purchases were made on
credit. Assuming that there were no other relevant transactions, what was the cash
balance at December 31, 2019?
3
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