323605548-2016-Vol-1-Ch-2-Answers

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2

Total amount of cash

Total amount of cash P243,570P243,570

Alternative computation: Alternative computation: Reported

Reported total total P330,820P330,820

Adjustments:

Adjustments: Sinking Sinking fund fund cash cash ( ( 35,000)35,000) Short

Short term term treasury treasury bills bills ( ( 52,000)52,000) Unreplenished

Unreplenished petty petty cash cash expenses expenses ( ( 250)250) Correct

Correct cash cash balance balance P243,570P243,570

The outstanding checks of P15,200

The outstanding checks of P15,200 was ignored since the given balance of cash is a was ignored since the given balance of cash is a cash balancecash balance per books.

per books. Short-term treasury Short-term treasury bills of bills of P52,000 is reported P52,000 is reported as part as part of trading seof trading securities unlesscurities unless there is an indication of a maturity of three months or less in which case, they are included as there is an indication of a maturity of three months or less in which case, they are included as part of cash and c

part of cash and cash equivalentsash equivalents. . Meanwhile, sinking fund cash Meanwhile, sinking fund cash of P35,000 is reported as aof P35,000 is reported as a noncurrent financial asset.

noncurrent financial asset.

2-2.

2-2. (Cotton (Cotton Company)Company) (a)

(a)

Reported

Reported checkbook checkbook balance balance P180,000P180,000 Adjustments:

Adjustments:

Customer’s post dated check included in the balance

Customer’s post dated check included in the balance ( ( 65,000)65,000) Customer’s check returned by bank marked DAIF

Customer’s check returned by bank marked DAIF ( 20,000)( 20,000) Company

Company check check recorded recorded but but not not yet yet mailed mailed 15,00015,000 Cash

Cash reported reported on on December December 31, 31, 2016 2016 statement statement of of financial financial position position P110,000P110,000 (b)

(b) Accounts Accounts receivable receivable 65,00065,000 Cash

Cash in in bank bank 65,00065,000

Accounts

Accounts receivable receivable 20,00020,000 Cash

Cash

Accounts

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2-3.

2-3. (Grain (Grain Company)Company) Balance

Balance per per general general ledger ledger P2,205,600P2,205,600 Non-cash items:

Non-cash items:

Customer’s DAIF checks returned by bank

Customer’s DAIF checks returned by bank P P 20,00020,000 Cash in BDO earmarked for purchase

Cash in BDO earmarked for purchase of

of equipment equipment 750,000750,000 IOUs

IOUs from from employees employees 5,2005,200 Cash

Cash in in sinking sinking fund fund 500,000500,000 Customers’ post dated chec

Customers’ post dated checks ks 25,40025,400 Travel advances

Travel advances 8,000 8,000 1,308,6001,308,600 Correct

Correct cash cash balance balance P P 897,000897,000 Cus

Customers’ DAIF checks, IOUs and customers’ post dated checks are reported as receivables;tomers’ DAIF checks, IOUs and customers’ post dated checks are reported as receivables; travel advances are prepaid expenses; while savings account in BDO and cash in sinking fund are travel advances are prepaid expenses; while savings account in BDO and cash in sinking fund are reported as noncurrent financial assets.

reported as noncurrent financial assets. 2-4.

2-4. (Rod (Rod Company)Company) Petty cash (10,000

Petty cash (10,000 – – 1,250) 1,250) P P 8,7508,750 Cash on hand (625,000

Cash on hand (625,000 – – 17,500) 17,500) 607,500607,500 Cash

Cash in in bank- bank- General General (525,000 (525,000 + + 12,500) 12,500) 537,500537,500 Cash

Cash in in bank, bank, Payroll Payroll (320,000 (320,000 + + 10,000) 10,000) 330,000330,000 Total

Total P1,483,750P1,483,750

IOU from an employee and cust

IOU from an employee and customers’ post dated check are receiomers’ post dated check are receivable items; vable items; the bank overdraftthe bank overdraft in another bank is reported as a current liability (offset can be made only if the accounts are with in another bank is reported as a current liability (offset can be made only if the accounts are with the same bank); the savings deposit is a non-current item since it is intended for a non-current the same bank); the savings deposit is a non-current item since it is intended for a non-current purpose (for plant expansion).

purpose (for plant expansion). 2-5.

2-5. (Latte (Latte Company)Company)

Cash and cash equivalents: Cash and cash equivalents: Savings account with Allied Bank Savings account with Allied Bank

Per

Per books books P P 900,000900,000 Customer’s postdated check

Customer’s postdated check (320,000) (320,000) P580,000P580,000 Checking account with Allied Bank

Checking account with Allied Bank Per

Per books books P1,400,000P1,400,000 Issued

Issued postdated postdated check check 300,000 300,000 1,700,0001,700,000 Bills

Bills and and coins coins in in the the petty petty cash cash fund fund 9,8509,850 Money

Money market market fund fund which which allows allows check check writing writing 2,000,0002,000,000 Certificate

Certificate of of deposit deposit with with term term of of 90 90 days days 1,000,0001,000,000 Payroll fund with BDO

Payroll fund with BDO Per

Per books books P6,000,000P6,000,000 Unissued

Unissued but but recorded recorded check check 50,000 50,000 6,050,0006,050,000 Cash

Cash balance balance with with BPI BPI 5,000,0005,000,000 Correct

Correct cash cash and and cash cash equivalents equivalents P16,339,850P16,339,850 The items not included in cash and c

The items not included in cash and cash equivalents shall be presented as ash equivalents shall be presented as follows:follows: Expenses in the statement of comprehensive income (P150

Expenses in the statement of comprehensive income (P150 cashcash shortage

shortage in in petty petty cash cash fund fund + + expense expense receipts receipts of of P5,000) P5,000) P P 5,1505,150 Current assets:

Current assets: Certificates

Certificates of of deposit deposit (with (with term term of of 120 120 days) days) 2,000,0002,000,000 Accounts receivab

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2-6.

2-6. (Jessie (Jessie Company)Company) Nov.

Nov. 20 20 Petty Petty cash cash fund fund 5,0005,000 Cash

Nov.

Nov. 20 20 to to No No entryentry Dec. 15

Dec. 15 Dec.

Dec. 16 16 Transportation Transportation expense expense 1,5001,500 Representation

Representation expense expense 1,2001,200

Freight-in 1,300

Repairs

Repairs expense expense 920920

Cash

Dec. 16

Dec. 16 – – 31 31 No No entryentry Dec.

Dec. 31 31 Transportation Transportation expense expense 340340 Supplies

Supplies expense expense 1,4001,400

Petty

Petty cash cash fund fund 1,7401,740

Jan. 1

Jan. 1 Petty cash fund Petty cash fund 1,7401,740 Transportation expense

Transportation expense 340340

Supplies

Supplies expense expense 1,4001,400

Jan. 1-8

Jan. 1-8 No entryNo entry Jan. 9

Jan. 9 Transportation expense (340 + 120) Transportation expense (340 + 120) 460460 Supplies

Supplies expense expense (1,400 (1,400 + + 1,300) 1,300) 2,7002,700 Representation

Representation expense expense 1,8001,800 Cash

9

9 Petty Petty cash cash fund fund 3,0003,000 Cash

2-7.

2-7. (Coral (Coral Company)Company) (a)

(a) Petty Petty cash cash fund fund P5,000.00P5,000.00 Amount

Amount of of cash cash on on hand hand P P 670.40670.40 Total petty cash vouchers:

Total petty cash vouchers: Office

Office supplies supplies P P 341,60341,60

Postage 780.00 Postage 780.00 Representation 1,000.00 Representation 1,000.00 Transportation Transportation 1,321.401,321.40 Miscellaneous Miscellaneous 837.60 837.60 4,280.60 4,280.60 4,951.004,951.00 Shortage

Shortage in in the the petty petty cash cash fund fund P P 49.0049.00 (b)

(b) Office Office supplies supplies expense expense 341.60341.60 Postage

Postage expense expense 780.00780.00 Representation

Representation expense expense 1,000.001,000.00 Transportation expense

Transportation expense 1,321.401,321.40 Miscellaneous

Miscellaneous expense expense 837.60837.60 Cash

Cash short short and and over over 49.0049.00 Petty

Petty cash cash fund fund 4,329.604,329.60

2-8.

2-8. (Prada (Prada Company)Company) 1.

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4.

4. May May 20 20 Freight-in Freight-in 2,5002,500

Freight-out 3,000

Supplies

Supplies expense expense 800800 Cash

Cash in in bank bank 6,3006,300 5.

5. No No entryentry 6.

6. May May 31 31 Freight Freight in in 1,2001,200 Transportation expense

Transportation expense 150150

Employee

Employee benefit benefit expense expense 320320 Advances

Advances to to employees* employees* 630630 Petty cash fund (8,000

Petty cash fund (8,000 – – 5,700) 5,700) 2,3002,300 *(IOU of 500 + short of 130)

*(IOU of 500 + short of 130) Per count

Per count Bills

Bills and and coins coins P5,700P5,700 Paid petty cash vouchers

Paid petty cash vouchers (1,200

(1,200 + + 150 150 + + 320 320 + + 500) 500) 2,1702,170 Total

Total P7,870P7,870

Petty

Petty cash cash fund, fund, imprest imprest balance balance 8,0008,000 Cash

Cash shortage shortage P P 130130

2-9.

2-9. (Canon (Canon Company)Company) (a)

(a) Bills Bills and and coins coins 1,4501,450 PCVs

PCVs dated dated July July 1-4, 1-4, 2016 2016 (undisbursed (undisbursed as as of of June June 30) 30) 800800 Adjusted

Adjusted balance balance of of petty petty cash cash fund fund 2,2502,250 Unreleased

Unreleased payroll payroll (1,500)(1,500) Correct

Correct petty petty cash cash balance balance 750750 (b)

(b) Per Per countcount Bills

Bills and and coins coins P P 1,4501,450 PCVs

PCVs dated dated June June 3,3003,300 PCVs

PCVs dated dated July July 800800

IOU

IOU from from an an employee employee 1,4001,400 Employee’s post dated check

Employee’s post dated check 2,0002,000 Total per count

Total per count P 8,950P 8,950

Cashier’s accountability Cashier’s accountability

Petty

Petty cash cash fund fund P10,000P10,000 Unreleased

Unreleased payroll payroll 1,5001,500 Total accountability

Total accountability 11,50011,500

Cash

Cash shortage shortage P P 2,5502,550

(c)

(c) Miscellaneous Miscellaneous expenses expenses 3,3003,300 Receivable

Receivable from from employees employees (1,400 (1,400 + + 2,000) 2,000) 3,4003,400 Cash

Cash short/over short/over 2,5502,550 Petty

Petty cash cash fund fund 9,2509,250

2-10. 2-10.

(a) (a) Bills

Bills and and coins coins P4,560P4,560

Petty

Petty cash cash vouchers vouchers dated dated January January 2016 2016 1,1301,130 IOUs

IOUs dated dated January January 2016 2016 1,0001,000 Total

Total P6,690P6,690

Unreleased

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(b)

(b) Per Per countcount Bills

Bills and and coins coins P4,560P4,560 Paid PCV’s

Paid PCV’s dated

dated Dec. Dec. 2015 2015 3,1403,140 dated

dated Jan. Jan. 2016 2016 1,1301,130 IOUs

IOUs

dated

dated Dec. Dec. 2015 2015 1,8001,800 dated

dated Jan. Jan. 2016 2016 1,0001,000 Total per count

Total per count P11,630P11,630

Cashier’s accountability Cashier’s accountability

Petty

Petty cash cash fund fund P10,000P10,000 Unreleased

Unreleased payroll payroll 2,0002,000 Total accountability

Total accountability P12,000P12,000

Cash

Cash shortage shortage P P 370370

(c)

(c) Expenses Expenses 3,1403,140

Receivables

Receivables from from employees employees 1,8001,800 Cash

Cash short/over short/over 370370 Petty

Petty cash cash fund fund 5,3105,310 Correct

Correct PCF PCF = = 10,00010,000 – – 5,310 5,310 = = P4,690P4,690 2-11.

2-11. (Giordano (Giordano Corporation)Corporation)

Giordano Corporation Giordano Corporation Bank Reconciliation Statement Bank Reconciliation Statement

December 31, 2016 December 31, 2016 Balance

Balance per per bank bank statement statement P199,925P199,925 Add: Cash

Add: Cash on on hand hand for for undeposited undeposited receipts receipts P13,025P13,025 Deposit

Deposit in in transit transit 35,000 35,000 48,02548,025 Total

Total P252,950P252,950

Deduct:

Deduct: Outstanding Outstanding checks checks 204,055204,055 Adjusted

Adjusted balance balance P P 43,89543,895

Balance

Balance per per books books P(32,560)P(32,560)

Add:

Add: Note Note receivable receivable collected collected by by bank, bank, incl incl interest interest of of P2,500 P2,500 252,500252,500 Total

Total P219,940P219,940

Deduct:

Deduct: Customer’s NSF check returned by bankCustomer’s NSF check returned by bank P42,040P42,040 Customer’s check for P29,040 erroneously

Customer’s check for P29,040 erroneously recorded

recorded as as P94,020 P94,020 64,98064,980 Cash

Cash sales sales missing missing 64,02564,025 Petty

Petty cash cash fund fund 5,000 5,000 176,045176,045 Adjusted

Adjusted balance balance P P 43,89543,895

(b)

(b) Adjusting Adjusting entries:entries: Cash

Notes

Notes Receivable Receivable 250,000250,000 Interest

Interest Revenue Revenue 2,5002,500

Accounts

Accounts Receivable Receivable (42,040 (42,040 + + 64,980) 64,980) 107,020107,020 Loss

Loss from from Theft Theft 64,02564,025 Petty

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Total Cash on the statement of financial positi Total Cash on the statement of financial position:on:

Petty

Petty cash cash fund fund of of P3,200 P3,200 + + Cash Cash in in bank bank of of P43,895 P43,895 P47,095P47,095 2-12.

2-12. (Pound (Pound Company)Company) (a)

(a) Per Per PerPer

Bank Books

Balances

Balances before before adjustments adjustments P31,848 P31,848 P17,194P17,194 Bank

Bank service service charge charge ( ( 109)109)

Debit

Debit memo memo for for printed printed checks checks ( ( 225)225) Outstanding

Outstanding checks checks (6,728)(6,728)

Deposit

Deposit of of July July 31 31 not not yet yet recorded recorded by by bank bank 4,8804,880 Proceeds

Proceeds of of a a bank bank loan, loan, net net of of P300 P300 interest interest 5,7005,700 Proceeds from customer’s note, including P100 interest

Proceeds from customer’s note, including P100 interest 8,1008,100 Check

Check #1210 #1210 for for P2,100 P2,100 erroneously erroneously deducted deducted by by bank bank as as P1,200 P1,200 (900)(900) Stolen check lacking authorized signature deducted by bank in

Stolen check lacking authorized signature deducted by bank in error

error

800 800 Customer’s NSF check returned by bank

Customer’s NSF check returned by bank _______ _______ (760)(760) Correct

Correct cash cash balance balance P29,900 P29,900 P29,900P29,900 (b) Adjusting en

(b) Adjusting entry at July 31, 2016 try at July 31, 2016 (compound f(compound form)orm) Miscellaneous

Miscellaneous Expenses Expenses (109 (109 + + 125) 125) 234234 Accounts

Accounts Receivable Receivable 760760

Interest

Interest Expense Expense 300300

Cash

Cash in in Bank Bank 12,80612,806

Bank

Bank Loan Loan 6,0006,000

Notes

Notes Receivable Receivable 8,0008,000

Interest

Interest Revenue Revenue 100100

2-13.

2-13. (Bench (Bench Company)Company)

Per

Per Bank Bank Per Per BooksBooks Balances

Balances before before adjustments adjustments P892,346.30 P892,346.30 P590,884.60P590,884.60 Outstanding

Outstanding checks checks (333,788.20)(333,788.20) Receipts

Receipts of of 12/31/16 12/31/16 deposited deposited on on 1/2/17 1/2/17 53,172.0053,172.00 Service

Service charges charges for for December December ( ( 225.00)225.00) Proceeds

Proceeds of of bank bank loan loan omitted omitted from from co. co. records records 97,000.0097,000.00 Deposit

Deposit of of 12/23/16 12/23/16 omitted omitted from from bank bank records records 28,924.1028,924.10 Check of Rome Products charged for lack of

Check of Rome Products charged for lack of countercounter

signature (8,737.40)

Bank

Bank error error for for a a deposit deposit of of P31,824 P31,824 recorded recorded as as P31,814 P31,814 10.0010.00 Check

Check of of Birch Birch Company Company erroneously erroneously charged charged by by bank bank 26,900.0026,900.00 Proceeds

Proceeds of of note note collected collected by by bank bank 20,350.0020,350.00 Erroneous

Erroneous debit debit by by bank bank for for bank bank loan loan paid paid by by the the co. co. 50,000.0050,000.00 Bank

Bank error error for for a a deposit deposit of of P48,071 P48,071 recorded recorded as as P48,171 P48,171 ( 100.00( 100.00 Deposit

Deposit of of Birch Birch Co. Co. erroneously erroneously credited credited by by bank bank (18,192.00) (18,192.00) ____________________ Adjusted

Adjusted cash cash balance balance P699,272.20 P699,272.20 P699,272.20P699,272.20

2-14.

2-14. (Amethyst (Amethyst Corporation)Corporation) Balance

Balance per per bank bank statement statement P169,263P169,263 Deposit

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Chapter 2

Chapter 2 – – Cash and Cash Equivalents Cash and Cash Equivalents

2-15.

2-15. (Silver (Silver Company)Company) Balance

Balance per per bank bank statement statement P380,750P380,750 Deposits

Deposits in in transit transit 52,00052,000

Outstanding checks (67,500

Outstanding checks (67,500 – – 9,000) 9,000) (58,500)(58,500) Erroneous

Erroneous credit credit by by bank bank ( ( 4,000)4,000) Check of Silver Lining charged

Check of Silver Lining charged by bank to Silver Co.’s accountby bank to Silver Co.’s account 12,00012,000 Correct

2-16.

2-16. Cash Cash balance balance per per books, books, March March 1 1 P115,963.70P115,963.70 Cash

Cash receipts receipts during during March March 246,475.00246,475.00 Cash

Cash disbursements disbursements during during March March (334,709.10)(334,709.10) Bank

Bank service service charge charge for for March March (92.00)(92.00) Cash

Cash balance balance per per books books at at March March 31 31 P P 27,637.6027,637.60 Cash

Cash balance balance per per bank bank statement statement P15,341.40P15,341.40 Deposit

Deposit in in transit transit 9,000.009,000.00 Outstanding

Outstanding checks checks (2,703.80)(2,703.80) Cash

Cash balance balance reflected reflected per per bank bank 21,637.6021,637.60 Suspected

Suspected cash cash shortage shortage (undeposited (undeposited collections) collections) P P 6,000.006,000.00

2-17.

2-17. (Pearl (Pearl Corporation)Corporation) Balance

Balance per per bank bank statement statement P400,000P400,000 Add

Add receipts receipts of of 12/31/16 12/31/16 not not yet yet deposited deposited 100,000100,000 Balance

Balance per per bank bank statement statement before before outstanding outstanding checks checks P500,000P500,000 Balance

Balance per per books books P387,000P387,000 Bank

Bank service service charge charge for for December December (1,000)(1,000) Paid

Paid check check for for P40,000 P40,000 recorded recorded as as P4,000 P4,000 (36,000)(36,000) Cu

Customer’s check returned by bankstomer’s check returned by bank marked marked DAIF DAIF (22,000) (22,000) 328,000328,000 Outstanding

Outstanding checks checks at at December December 31, 31, 2016 2016 P172,000P172,000 Proof:

Proof:

Per

Per bank bank Per Per booksbooks Reported

Reported balances balances P400,000 P400,000 P387,000P387,000 Receipts

Receipts not not yet yet deposited deposited 100,000100,000 December

December bank bank service service charge charge (1,000)(1,000) Paid

Paid check check for for P40,000 P40,000 recorded recorded as as P4,000 P4,000 (36,000)(36,000) Customer’s check returned by bank

Customer’s check returned by bank (22,000)(22,000)

Outstanding

Outstanding checks checks at at December December 31 31 (172,000)(172,000) Correct

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Chapter 2

Balances

Balances per per books books P270,311.00 P270,311.00 P1,072,850.00 P1,072,850.00 P1,195,536.50 P1,195,536.50 P147,624.50P147,624.50 Bank service charges

Bank service charges November

November 30 30 (295.00) (295.00) (295.00)(295.00) December

December 31 31 158.00 158.00 (158.00)(158.00)

Interest credit by bank Interest credit by bank

November

November 30 30 5,500.00 5,500.00 (5,500.00)(5,500.00) December

December 31 31 4,925.00 4,925.00 4,925.004,925.00

Uncollectible customer’s check

Uncollectible customer’s check 5,947.00 5,947.00 (5,947.00)(5,947.00) NSF returned and redeposited

NSF returned and redeposited in

in Dec. Dec. 5,000.00 5,000.00 5,000.005,000.00 Check #137412 for P2,300

Check #137412 for P2,300 recorded

recorded as as P3,200 P3,200 in in error error __________ __________ ____________ ____________ _____(900.00) _____(900.00) _____900.00_____900.00 Correct

Correct balances balances P275,516.00 P275,516.00 P1,077,275.00 P1,077,275.00 P1,205,446.50 P1,205,446.50 P147,344.50P147,344.50

2-19.

2-19. (Bruins (Bruins Company)Company)

Bruins Company Bruins Company

Proof of Cash Proof of Cash March 31

March 31 – – April 30, 2016 April 30, 2016

March 31 March 31 April April Receipts Receipts April April Disbursements

Disbursements April April 3030 Balances

Balances per per bank bank statement statement P2,203,500 P2,203,500 P5,251,500 P5,251,500 P4,357,750 P4,357,750 P3,097,250P3,097,250 Outstanding checks: Outstanding checks: March March 31 31 (275,000) (275,000) (275,000)(275,000) April April 30 30 580,000 580,000 (580,000)(580,000) Deposits in transit Deposits in transit March March 31 31 125,000 125,000 (125,000)(125,000) April April 30 30 670,000 670,000 670,000670,000 Erroneous

Erroneous bank bank credit credit (20,000) (20,000) (20,000)(20,000) Undeposited receipts

Undeposited receipts Erroneous

Erroneous bank bank debit debit memo memo (45,000) (45,000) 45,00045,000 Adjusted

Adjusted balances balances P2,053,500 P2,053,500 P5,776,500 P5,776,500 P4,617,750 P4,617,750 P3,212,250P3,212,250 Balances

Balances per per books books P2,055,300 P2,055,300 P5,567,000 P5,567,000 P4,619,800 P4,619,800 P3,002,500P3,002,500 Note

Note collected collected by by bank bank in in April April 17,000 17,000 17,00017,000 Bank service charges

Bank service charges March

March (1,800) (1,800) (1,800)(1,800)

April

April 2,450 2,450 (2,450)(2,450)

Company’s note discounted with Company’s note discounted with

the bank 200,000 the bank 200,000 – –

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Chapter 2

b.

b. August August disbursements disbursements per per bank bank statement statement P220,000P220,000 Outstanding

Outstanding checks checks at at August August 31 31 25,00025,000 Outstanding

Outstanding checks checks at at July July 31 31 (60,000)(60,000) Erroneous

Erroneous bank bank credit credit in in July July corrected corrected in in August August (10,000)(10,000) NSF

NSF check check (35,000)(35,000)

Service

Service charge charge by by bank bank (1,500)(1,500) Cash

Cash disbursements disbursements per per books books during during August August P138,500P138,500 c.

c. Balance Balance per per books books at at July July 31 31 P150,000P150,000 Cash

Cash receipts receipts per per books books (see (see a) a) 220,000220,000 Cash

Cash disbursements disbursements per per books books (see (see b) b) (138,500)(138,500) Unadjusted

Unadjusted cash cash balance balance per per books books at at August August 31 31 P231,500P231,500 or

or

Unadjusted bank statement balance at August 31 Unadjusted bank statement balance at August 31

(180,000 + 275,000

(180,000 + 275,000 – – 220,000) 220,000) P235,000P235,000 Outstanding

Outstanding checks, checks, August August 31 31 (25,000)(25,000) Deposits

Deposits in in transit, transit, August August 31 31 35,00035,000 NSF

NSF check check 35,00035,000

Bank

Bank service service charges charges 1,5001,500 Note

Note collected collected by by bank bank (50,000)(50,000) Unadjusted

Unadjusted cash cash balance balance per per ledger ledger at at August August 31 31 P231,500P231,500 d.

d. Unadjusted Unadjusted bank bank statement statement balance balance P235,000P235,000 Outstanding

Deposits

Deposits in in transit transit 35,00035,000

Correct

Correct cash cash balance balance at at August August 31 31 P245,000P245,000 or

or

Unadjusted

Unadjusted cash cash balance balance per per books books P231,500P231,500 NSF

NSF check check (35,000)(35,000)

Bank

Bank service service charges charges (1,500)(1,500) Note

Note collected collected by by bank bank 50,00050,000 Correct

Correct cash cash balance balance at at August August 31 31 P245,000P245,000

2-21.

2-21. (Leo (Leo Company)Company) a.

a. Outstanding Outstanding checks, checks, July July 31, 31, 2016 2016 P P 6,4006,400 Disbursements

Disbursements per per books books during during August August 349,000349,000 Checks

Checks cleared cleared during during August August ( ( 344,000)344,000) Outstanding

Outstanding checks, checks, August August 31, 31, 2016 2016 P P 11,40011,400 b.

b. Deposits Deposits in in transit, transit, August August 31, 31, 2016 2016 P 40,000P 40,000 Deposits

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Chapter 2

2-23.

2-23. (Diamond (Diamond Company)Company) Deposits

Deposits in in transit transit at at July July 31 31 P P 4,5004,500 Receipts per books (40,000

Receipts per books (40,000 – – 5,120) 5,120) 34,88034,880 Deposits per bank (45,600

Deposits per bank (45,600 – – 6,300 6,300 – – 10,000)) 10,000)) (29,300)(29,300) Deposits

Deposits in in transit transit at at August August 31 31 P P 10,08010,080 Proof:

Proof: August August ReceiptsReceipts

Per

Per bank bank Per Per booksbooks Reported

Reported receipts/credits receipts/credits P45,600 P45,600 P40,000P40,000 Deposits

Deposits in in transit, transit, July July 31 31 (4,500)(4,500) Note

Note collected collected by by bank bank in in August August 6,3006,300 Note collected by bank in July recorded

Note collected by bank in July recorded by

by the the company company in in August August (5,120)(5,120) Erroneous charge by bank in July

Erroneous charge by bank in July corrected

corrected in in August August (10,000)(10,000) Deposits

Deposits in in transit transit at at August August 31 31 (see (see above) above) 10,080 10,080 __________________ Correct

Correct totals totals P41,180 P41,180 P41,180P41,180

2-24.

2-24. (Real (Real Gem Gem Company)Company) Outstanding

Outstanding checks, checks, 12/31/16 12/31/16 P37,855.00P37,855.00 Add checks cleared by bank during December

Add checks cleared by bank during December Bank

Bank disbursements disbursements during during December December P62,277.00P62,277.00 Outstanding

Outstanding checks, checks, 11/30/16 11/30/16 (24,750.00)(24,750.00) Erroneous bank credit in November

Erroneous bank credit in November cleared

cleared in in December December (9,218.00) (9,218.00) 28,309.0028,309.00 Cash

Cash disbursements disbursements per per books books during during December December P66,164.00P66,164.00

2-25.

2-25. (Lira (Lira Company)Company) Deposits

Deposits in in transit, transit, August August 31 31 P P 9,5009,500 Add

Add cash cash receipts receipts per per general general ledger ledger 30,50030,500 Less

Less deposits deposits per per bank bank (30,200)(30,200) Deposits

Deposits in in transit, transit, September September 30 30 P P 9,8009,800 Outstanding

Outstanding checks, checks, September September 30 30 P P 2,0002,000 Add

Add checks checks cleared cleared by by bank bank during during September September 23,60023,600 Less

Less cash cash disbursements disbursements per per general general ledger ledger (24,000)(24,000) Outstanding

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Chapter 2

Employee advances of P880 is reported as a receivable; unreplenished petty cash vouchers are Employee advances of P880 is reported as a receivable; unreplenished petty cash vouchers are expenses; and currency in an enveloped marked collections for charity is a non-company fund. expenses; and currency in an enveloped marked collections for charity is a non-company fund. Postal money orders of P1,800 is a proper inclusion to cash. The savings account deposit in Postal money orders of P1,800 is a proper inclusion to cash. The savings account deposit in Security Bank is reported as a non-current asset since it is intended for

Security Bank is reported as a non-current asset since it is intended for a non-current purpose.a non-current purpose.

MULTIPLE CHOICE QUESTIONS MULTIPLE CHOICE QUESTIONS Theory Theory MC1 MC1 A A MC11 MC11 D D MC21 MC21 BB MC2 MC2 C C MC12 MC12 D D MC22 MC22 AA MC3 MC3 D D MC13 MC13 D D MC23 MC23 AA MC4 MC4 D D MC14 MC14 C C MC24 MC24 BB MC5 MC5 D D MC15 MC15 D D MC25 MC25 DD MC6 MC6 D D MC16 MC16 A A MC26 MC26 BB MC7 MC7 A A MC17 MC17 C C MC27 MC27 DD MC8 MC8 A A MC18 MC18 C C MC28 MC28 DD MC9 MC9 A A MC19 MC19 CC MC10 MC10 C C MC20 MC20 BB Problems Problems MC29

MC29 CC Cash Cash in in banks banks P2,250,000P2,250,000

Cash

Cash on on hand hand 125,000125,000

Total

Total cash cash P2,375,000P2,375,000

MC30

MC30 DD Checkbook Checkbook balance balance P50,000P50,000

Check payable to Bataan properly dated but no

Check payable to Bataan properly dated but no t included int included in checkbook

checkbook balance balance 20,00020,000

Correct

MC31

MC31 CC Correct Correct cash cash balance balance in in Equitable-PCIBank Equitable-PCIBank P320,000P320,000 Currency

Currency and and coins coins in in petty petty cash cash fund fund 580580 Cash

Cash balance, balance, April April 30 30 P320,580P320,580 MC32

MC32 BB Cash Cash balance balance per per ledger ledger P682,250P682,250 Notes

Notes receivable receivable in in the the possession possession of of a a collecting collecting agency agency (25,000)(25,000) Post-dated

Post-dated check check included included in in the the undeposited undeposited receipts receipts (10,500)(10,500) Bond

Bond sinking sinking fund fund cash cash (127,500)(127,500) IOUs

IOUs signed signed by by employees employees (4,950)(4,950) Paid

Paid vouchers vouchers not not yet yet recorded recorded (6,450)(6,450) Correct

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Chapter 2

MC35

MC35 CC Cash Cash in in the the fund fund P P 440440

Miscellaneous

Miscellaneous expenses expenses 3,6403,640

Total

Total P4,080P4,080

Amount

Amount of of fund fund established established 4,0004,000 Cash

Cash overage overage P P 8080

MC36

MC36 BB Total bills and coins Total bills and coins P1,825P1,825 Certified

Certified check check of of general general manager manager 1,5001,500 Replenishment

Replenishment check check 5,1505,150

Correct

Correct amount amount of of petty petty cash cash fund fund P8,475P8,475 MC37

MC37 AA Amount Amount of of petty petty cash cash fund fund established established P10,000P10,000 Total amount in the drawer

Total amount in the drawer Correct

Correct petty petty cash cash fund fund P8,475P8,475 Petty

Petty cash cash vouchers vouchers not not yet yet replenished replenished 1,430 1,430 9,9059,905 Amount

Amount of of cash cash shortage shortage P P 9595 The unused postage stamps of P120 is part of the P280 postage stamps purchas

The unused postage stamps of P120 is part of the P280 postage stamps purchased.ed. This means that P120 will be reported as part of prepaid expenses

This means that P120 will be reported as part of prepaid expenses, whereas P160, whereas P160 will

will be rebe reported ported as as an an operating operating expense.expense. MC38

MC38 DD Corrected bank statement balance (50,000 + 20,000Corrected bank statement balance (50,000 + 20,000 – – 15,000) 15,000) P55,000P55,000 Correct balance per books before considering interest on note

Correct balance per books before considering interest on note (43,000

(43,000 – – 6,000 6,000 + + 15,000) 15,000) 52,00052,000 Interest

Interest on on the the note note collected collected by by the the bank bank P P 3,0003,000 MC39

MC39 BB Balance Balance per per bank bank statement statement P180,500P180,500 Deposit

Deposit in in transit transit 32,50032,500

Outstanding

Correct

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Chapter 2

MC45

MC45 BB Unadjusted Unadjusted cash cash balance balance per per books books P450,000P450,000 Collection

Collection by by bank bank 9,4009,400

Customer’s NSF check returned by bank

Customer’s NSF check returned by bank (3,200)(3,200) Customer’s check for P4,500 erroneously recorded as P5,400

Customer’s check for P4,500 erroneously recorded as P5,400 (900)(900) Check

Check written written for for P790 P790 erroneously erroneously recorded recorded as as P970 P970 180180 Correct

MC46

MC46 BB Cash Cash balance, balance, beginning beginning P62,000P62,000 Collections from sales (67,000 + 798,000

Collections from sales (67,000 + 798,000 – – 91,000) 91,000) 774,000774,000 Payments to creditors (78,000 + 583,000

Payments to creditors (78,000 + 583,000 – – 86,000) 86,000) (580,000)(580,000) Cash

Cash operating operating expenses expenses (107,000)(107,000) Cash

Cash balance, balance, ending ending P149,000P149,000 MC47

MC47 DD Petty Petty cash cash fund fund P1,500P1,500

Customer’s certified check

Customer’s certified check 5,0005,000

Unrestricted

Unrestricted demand demand deposits deposits 486,000486,000 Undelivered

Undelivered checks checks written written and and recorded recorded 12,00012,000 Total

Total cash cash P504,500P504,500

MC48

MC48 DD Cash Cash account account balance balance P96,000P96,000

Post-Post-dated customer’s check included in dated customer’s check included in the cash receiptsthe cash receipts (4,000)(4,000) Undelivered

Undelivered check check included included in in the the cash cash disbursements disbursements 7,0007,000 Correct

MC49

MC49 CC Balance, end, per bank (650,000 + 1,300,000Balance, end, per bank (650,000 + 1,300,000 – – 1,100,000) 1,100,000) P850,000P850,000 Deposit

Deposit in in transit, transit, June June 30 30 150,000150,000 Outstanding

Outstanding checks, checks, June June 30 30 (84,000)(84,000) Check

Check deposit deposit omitted omitted by by bank bank 7,5007,500 Correct

OR OR Balance

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Chapter 2

MC53

MC53 BB Outstanding Outstanding checks, checks, end end P25,000P25,000 Checks

Checks cleared cleared 224,200224,200

Outstanding

Outstanding checks, checks, beginning beginning (78,200)(78,200) Checks

Checks issued/Disbursemissued/Disbursements ents per per books books P171,000P171,000 MC54

MC54 AA December December deposits deposits per per bank bank P261,000P261,000 Deposit

Deposit in in transit, transit, beginning beginning (41,500)(41,500) Erroneous

Erroneous bank bank charge charge in in November November cleared cleared (credited) (credited) in in December December (15,000)(15,000) Cash

Cash receipts receipts per per books books P204,500P204,500 MC55

MC55 DD Balance Balance per per bank, bank, December December 31 31 P217,200P217,200 Outstanding

Cash

Cash balance balance per per books, books, December December 31 31 P192,200P192,200 MC56

MC56 CC Correct Correct cash cash balance balance (45,000 (45,000 + + 10,000 10,000 + + 8,000) 8,000) P63,000P63,000 Balance per bank before outstanding checks

Balance per bank before outstanding checks (34,000

(34,000 – – 300 300 – – 3,200 3,200 – – 3,600 3,600 + + 2,700) 2,700) 29,60029,600 Outstanding