Intermediate Accounting

First Quiz
Cash and Bank Reconciliation

Problem 1:

FPA Company uses a calendar-year accounting period. The following information is available about the company’s
cash.

FPA Company
Bank Reconciliation
Apr-30

Balance per bank statement 4,942

Add: Deposit in Transit 610
Total 5552
Deduct: Outstanding Checks
No. 606 177
No. 607 248 425
Correct Cash Balance 5127

Balance per books 5,139

Deduct: Bank Service Charge 12
Correct Cash Balance 5,127

JGB Bebe Bank

Genera Account: FPA Company

Date Debits Credits Balance

4.30 4,942
5.01 610 5,552
5.02 177 5,375
5.04 248 1,552 6,679
755 5,924
5.05 437 5,487
5.09 489 3,621 8,619
5.12 705 1,986 9,900
5.20 930 8,970
5.22 423 8,547

5.26 2,549 11,096

5.29 255 NSF 10,841

5.3 20 DM 10,821
5798 5,023
5.31 14 SC 1,290 6,299

Legend: DM - Debit Memo NSF - No Sufficient Funds

CM - Credit Memo SC - Service Charge
 FPA Company’s Cash Account
Taken from General Ledger
Cash
Balance, April 30 P 5,139
Cash Receipts Journal P 10,583 Cash Disbursement Journal P 10,816
Balance, May 31 4,906

Information Taken from FPA Company

Cash Receipts Journal Cash Payment Journal
Date Cash Debit Date Check No. Cash Credit
5-01 608 P-755
5-03 P 1,552 5-03 609 473
5-08 3,621 5-06 610 489
5-12 1,986 5-11 611 705
5-25 2,549 5-16 612 930
5-31 875 5-21 613 243
P10, 583 5-27 614 511
5-29 615 5,798
5-30 616 346
5-31 617 566
P10, 816
Additional Information:
1. During May, a collection charge of P20 that was applicable to SSE Company was erroneously deducted by
the bank from FPA Company.
2. The credit memo shown on the bank statement relates to a note that the bank collected on FPA’s behalf.
The company hasn’t recorded the collection yet.
3. FPA failed to record the bank service charge for April (See April’s Bank Reconciliation)
4. The NSF Check shown on the bank statement had been received during the May from a customer on
account. The return of the check has not yet been recorded by FPA.
5. FPA made two errors in recording cash payments during May:
Actual Amount Amount
Check No. of Check Recorded
609 P 437 P473
613 423 243
Check no. 609 was for delivery expense; check no. 613 was issued to purchase equipment.

Required:
1. Prepare a bank reconciliation dated May 31
2. Prepare the necessary journal entries.

Problem 2:

Jillybee Company reported the following cash and cash equivalents at year-end:

Cash on Hand 1,900,000

Demand Deposit 465,980
Certificate of deposit – 60 days 540,977
Postdated Customer Check 976,090
Petty Cash Fund 15,465
Traveler’s Check 879,009
Manager’s Check 908,013

Required: Compute for the total cash and cash equivalents that should be reported as year-end?