University of Perpetual Help System Dalta

INTERMEDIATE ACCOUNTING I RJ CARASCO

PRACTICE SET

Problem 1
The books of Manila's Service, Inc. disclosed a cash balance of P687,570 on December 31,
2006. The bank statement as of December 31 showed a balance of P547,800. Additional
information that might be useful in reconciling the two balances follows:

(a) Check number 748 for P30,000 was originally recorded on the books as P45,000.
(b) A customer's note dated September 25 was discounted on October 12. The note was
dishonored on December 29 (maturity date). The bank charged Manila's account for
P142,650, including a protest fee of P2,650.
(c) The deposit of December 24 was recorded on the books as P28,950, but it was actually a
deposit of P27,000.
(d) Outstanding checks totaled P98,850 as of December 31.
(e) There were bank service charges for December of P2,100 not yet recorded on the books.
(f) Manila's account had been charged on December 26 for a customer's NSF check for
P12,960.
(g) Manila properly deposited P6,000 on December 3 that was not recorded by the bank.
(h) Receipts of December 31 for P134,250 were recorded by the bank on January 2.
(i) A bank memo stated that a customer's note for P45,000 and interest of P1,650 had been
collected on December 27, and the bank charged a P360 collection fee.

1. Adjusted cash in bank balance

2. Net adjustment to cash as of December 31, 2006

Problem 2.

Balance per bank, Nov. 30, P150,000

2006
Add: Deposits in transit 24,000
Total 174,000

Less: Outstanding checks P28,000

Bank credit
recorded in error 10,000 38,000
Cash balance per books, Nov.
30, 2006 P136,000

The bank statement for

December 2006 contains the
following data:

Total deposits P110,000

Total charges, including an
NSF check of P8,000 and a
service charge of P400 96,000
All outstanding checks on November 30, 2006, including the bank credit, were cleared in the
bank 1n December 2006.
There were outstanding checks of P30,000 and deposits in transit of P38,000 on December
31, 2006.
Questions:

Based on the above and the result of your audit, answer the following:
1. How much is the cash balance per bank on December 31, 2006?
2. How much is the December receipts per books?
3. How much is the December disbursements per books?
4. How much is the cash balance per books on December 31, 2006?
5. The adjusted cash in bank balance as of December 31, 2006 is

Problem 3
The cash books of Grace Corporation show the following entries during the month of June
2016.
Cash Receipts Journal Check Register
Date Amount Date Check No. Amount
June 1 Balance 762,000 June2 801 15,625
4 Deposit 113,000 3 802 7,526
4 Deposit 811,000 5 803 229,205
7 Deposit 152,200 7 804 169,555
10 Deposit 11,300 8 805 74,936
10 Deposit 12,700 10 806 274,600
11 Deposit 73,000 11 807 34,842
17 Deposit 110,075 13 808 250,000
18 Deposit 3,725 14 809 1,070,000
18 Deposit 65,000 17 810 167,300
19 Deposit 26,463 19 811 3,130
20 Deposit 133,037 21 812 82,730
27 Deposit 273,628 23 813 127,200
30 Deposit 92,400 25 814 93,080
30 815 720

The bank statement for the month of June 2016 shows:

Checks No. Deposits Date Amount
Balance May 31 798,000
924,000 June 5 1,722,000
800 36,000 6 1,686,000
804 169,555 7 1,516,445
805 74,936 217,200 8 1,658,709
801 16,525
803 229,205 9 1,412,979
807 34,842 97,000 12 1,475,137
924 75,000
200 40,400 CM 13 1,440,337
(collection charge)
809 1,070,000 14 370,337
808 250,000 15 120,337
198,000 CM 16 318,337
810 167,300 113,800 19 264,837
812 82,730 159,500 21 341,607
806 274,600 24 67,007
273,628 28 340,635
811 3,130
DM 300 30 337,205

Upon investigation, the following are discovered:

CM - Represents a 60-day, 6% note for P40,000 collected by the bank for the account of
Grace Company.

CM - Represents a 60-day, 6% own note for P200,000 discounted by Grace Corporation with
the bank and not yet recorded in the books.

DM - Represents bank service charge for the month.

Check No. 924 represents a check signed by Graciele Company.

Collection charge – represents collection fee charged by the bank.

Questions
1. The unadjusted cash ledger balance of GRACE CORPORATION at June 30, 2016

2. The unadjusted cash bank balance of GRACE CORPORATION at June 30, 2016 is:

3. The deposit in transit of GRACE CORPORATION at June 30, 2016 is:

4. The outstanding checks of GRACE CORPORATION at June 30, 2016 is:

5. The adjusted cash balance of GRACE CORPORATION at June 30, 2016 is:

END

‘’It’s not that I’m so smart, it’s just that I stay with problems longer’’