In your audit of the cash account of Maeng 

Company, you were requested by the client to prepare a four-column reconciliation of

receipts, disbursements, and balances to reconstruct the balances per books.
Nov. 30 Dec. 31
a. Balances per bank P 15 500 P 20 930
b. Deposits in transit 2 310 3 450
c. Outstanding checks 4 260 3 870
d. Bank collections not in books 1 500 1 900
e. Bank charges not in books ### 640
f. Of the checks outstanding on December 31, one check for P 700 was certified at the request of the payee.
g. Receipts for December per bank statement: P 280 370
h. DAIF check from customer was charged by the bank on December 28 and has not been recorded: P 850
i. DAIF check returned in November and recorded in December: P 1 150
j. DAIF check returned and recorded in December, P 900
k. Check of Maeng Company charged by the bank in error, P 2 350
l. Receipt on December 6 paid out in cash for travel expenses recorded as receipts and disbursements per books, P 750
m. Error in recording customer's check on December 20, P 165 instead of P 365
n. Error in disbursements journal for December, P 3 250 instead of P 325

You noted in your audit that the DAIF checks returned by the bank are recorded as a reduction on the cash receipts journal instead
of recording it at cash disbursements journal; redeposits are recorded as regular cash receipts.

How much is the unadjusted book receipts for December?

A. P 285 440
B. P 280, 760
C. P 279, 445
D. P 279, 610

REF Bank to Book Method

Nov. 30 Receipts Disbursement Dec. 31
A./G. Bank balance 15,500 280,370 274,940 20,930
B. Deposit in Transit
November 2,310 -2,310
 December 3,450 3,450
C. Outstanding Checks
November -4,260 -4,260
December 3,870 -3,870
D. Collections by bank not recorded to book
November -1,500 1,500
December -1,900 -1,900
E. Bank charges
November 950 950
December -640 640
F. Certified check request of the payee -700 700
NSF Checks returned
H. December and not recorded -850 850
I. November and recorded in Dec. 1,150 -1,150
J. December and recorded in Dec. -900 -900
K. Check of another company erroneously charged by the bank -2,350 2,350
L. Cash receipts used as payment 750 750
M. Book error – overstatement of recording customer’s check -200 -200
N. Book error – overstatement of disbursement 2,925 -2,925
Book Balance 14,150 279,610 273,735 20,025
PROBLEM for Proof of Cash
In your audit of the cash account of Maeng Company, you were requested by the client to prepare a four-column reconciliation of receipts, disbursements, and balances to
reconstruct the balances per books.
Nov. 30 Dec. 31
a. Balances per bank P 15 500 P 20 930
b. Deposits in transit 2 310 3 450
c. Outstanding checks 4 260 3 870
d. Bank collections not in books 1 500 1 900
e. Bank charges not in books ### 640
f. Of the checks outstanding on December 31, one check for P 700 was certified at the request of the payee.
g. Receipts for December per bank statement: P 280 370
h. DAIF check from customer was charged by the bank on December 28 and has not been recorded: P 850
i. DAIF check returned in November and recorded in December: P 1 150
j. DAIF check returned and recorded in December, P 900
k. Check of Maeng Company charged by the bank in error, P 2 350
l. Receipt on December 6 paid out in cash for travel expenses recorded as receipts and disbursements per books, P 750
m. Error in recording customer's check on December 20, P 165 instead of P 365
n. Error in disbursements journal for December, P 3 250 instead of P 325

You noted in your audit that the DAIF checks returned by the bank are recorded as a reduction on the cash receipts journal instead of recording it at cash disbursements
journal; redeposits are recorded as regular cash receipts.

How much is the unadjusted book receipts for December?

A. P 285 440
B. P 280, 760
C. P 279, 445
D. P 279, 610

SUMMARY OF TREATMENT FOR PROOF OF CASH

ADJUSTED BALANCE METHOD BEG CR CD END
Cash in Banks per BOOKS 13,550 281,510 274,550 20,510
CM - LM - Credit Memo Last Month xx (xx)
CM - TM - Credit Memo this Month xx xx
DM - LM - Debit Memo Last Month (xx) (xx)
DM - TM - Debit Memo this Month xx (xx)

ADJUSTED BALANCE XXX XXX XXX XXX

BANK TO BOOK METHOD
Cash in Banks per BANK 15,500 280,370 274,940 20,930
DIT Last Month 2,310 (2,310)
DIT this Month 3,450 3,450
OC Last Month (4,260) (4,260)
 OC this Month 3,870 (3,870)
ADJUSTED BALANCE 13,550 281,510 274,550 20,510

REF Bank to Book Method

Nov. 30 Receipts Disbursement Dec. 31
A./G. Bank balance 15,500 280,370 274,940 20,930
B. Deposit in Transit
November 2,310 -2,310
December 3,450 3,450
C. Outstanding Checks
November -4,260 -4,260
December 3,870 -3,870
F. Certified check request of the payee -700 700
K. Check of another company erroneously charged by the bank -2,350 2,350
L. Cash receipts used as payment 750 750
D. Collections by bank not recorded to book
November -1,500 1,500
December -1,900 -1,900
E. Bank charges
November 950 950
December -640 640
NSF Checks returned
H. December and not recorded -850 850
I. November and recorded in Dec. 1,150 -1,150
J. December and recorded in Dec. -900 -900
M. Book error – overstatement of recording customer’s check -200 -200
N. Book error – overstatement of disbursement 2,925 -2,925
Book Balance 14,150 279,610 273,735 20,025

Source: AUDPROB | Audit of Cash & Cash Equivalents | SureCPAiPASS2021 | jipb162021

PROBLEM for Proof of cash
In your audit of the cash account of Cebu Company, you were requested by the client to prepare a four-column reconciliation of receipts, disbursements, and
balances to reconstruct the balances per books.
Nov. 30 Dec. 31
a. Balances per bank P 14,010 P 19,630
b. Deposits in transit 2,740 3,110
c. Outstanding checks 4,260 3,870
d. Bank collections not in books 1,200 1,600
e. Bank charges not in books 950 640
f.    Of the checks outstanding on December 31, one check for P700 was certified at the request of the payee.
g.     Receipts for December, per bank statement P281,070.
h.    DAIF check from customer was charged by the bank on December 28, and has not been recorded P 800.
i.    DAIF check returned in November and recorded in December P1,050.
j.      DAIF check returned and recorded in December, P900.
k.      Check of Cibo Company charged by the hank in error, P2,010.
l.    Receipt on December 6 paid out in cash for travel expenses, P 750 Recorded as receipts and disbursements per books.
m.      Error in recording customer's check on December 20, P165 instead P465.
n.   Error in disbursements journal for December, P3,250 instead of P325:

You noted in your audit that the DAIF checks returned by the bank recorded as a reduction on the cash receipts journal instead of recording it at cash
disbursements journal; redeposits are recorded as regular cash receipts.

REQUIRED:

1.    Prepare a 4-column bank reconciliation for the month December

a. Bank to book method;
b. Book to bank method; and
c. Adjusted balance method

2. Adjusting entries as of December 31, 2015.

1.    Prepare a 4-column bank reconciliation for the month December a. Bank to book method;
REF Bank to Book Method
Nov. 30 Receipts Disbursement Dec. 31 LEGEND:
A./G. Bank balance 14,010 281,070 275,450 19,630 BOOK 700
B. Deposit in Transit BANK 0
November 2,740 -2,740 -430
December 3,110 3,110 -340
C. Outstanding Checks 0
November -4,260 -4,260 0
December 3,870 -3,870 0
F. Certified check request of the payee -700 700 0
K. Check of another company erroneously charged by the bank -2,010 2,010 0
L. Cash receipts used as payment 750 750 0
D. Collections by bank not recorded to book 0
November -1,200 1,200 -300
December -1,600 -1,600 300
E. Bank charges 0
November 950 950 0
December -640 640 0
NSF Checks returned 0
H. December and not recorded -800 800 0
I. November and recorded in Dec. 1,050 -1,050 100
J. December and recorded in Dec. -900 -900 0
M. Book error – overstatement of recording customer’s check -300 -300 -100
N. Book error – overstatement of disbursement 2,925 -2,925 0
Book Balance 13,290 279,540 274,635 18,195 -70

Source: AUDPROB | Audit of Cash & Cash Equivalents | SureCPAiPASS2021 | jipb162021

1.    Prepare a 4-column bank reconciliation for the month December b. Book to bank method; and
REF Book to Bank Method
Nov. 30 Receipts Disbursement Dec. 31 LEGEND:
A./G. Book Balance 13,290 279,540 274,635 18,195 BOOK
E. Bank charges BANK
November -950 -950
December 640 -640
D. Collections by bank not recorded to book
November 1,200 -1200
December 1600 1,600
NSF Checks returned
I. November and recorded in Dec. -1,050 1,050
J. December and recorded in Dec. 900 900
H. December and not recorded 800 -800
M. Book error – overstatement of recording customer’s check 300 300
N. Book error – overstatement of disbursement -2925 2925
B. Deposit in Transit
November -2740 2740
December -3110 -3110
C. Outstanding Checks
November 4260 4260
December -3,870 3,870
F. Certified check request of the payee 700 -700
K. Check of another company erroneously charged by the bank 2010 -2010
L. Cash receipts used as payment -750 -750
Book Balance 14,010 281,070 275,450 19,630

Source: AUDPROB | Audit of Cash & Cash Equivalents | SureCPAiPASS2021 | jipb162021

1.    Prepare a 4-column bank reconciliation for the month December c. Adjusted balance method
REF Adjusted Bank Method
Nov. 30 Receipts Disbursement Dec. 31 LEGEND:
Unadjusted Book Balance 13,290 279,540 274,635 18,195 BOOK
E. Bank charges BANK
November (950) (950)
December 640 (640)
D. Collections by bank not recorded to book
November 1,200 (1,200)
December 1,600 1,600
NSF Checks returned
I. November and recorded in Dec. (1,050) 1,050
J. December and recorded in Dec. 900 900
H. December and not recorded 800 (800)
M. Book error – overstatement of recording customer’s check 300 300
N. Book error – overstatement of disbursement (2,925) 2,925
Adjusted Cash Balances 12,490 282,190 273,100 21,580
Nov. 30 Receipts Disbursement Dec. 31
Unadjusted Bank Balance 14,010 281,070 275,450 19,630
B. Deposit in Transit
November 2,740 (2,740)
December 3,110 3,110
C. Outstanding checks
November (4,260) (4,260)
December 3,870 (3,870)
F. Certified check request of the payee (700) 700
K. Check of another company erroneously charged by the bank (2,010) 2,010
L. Cash receipts used as payment 750 750
Book Balance 12,490 282,190 273,100 21,580

2. Adjusting entries as of December 31, 2015.

a.    Cash in Bank 1,600
Notes Receivable 1,600
b.    Bank Service Charge 640
Cash in Bank 640
 c.    Accounts Receivable 800
Cash in Bank 800
d.    Cash in Bank 300
Accounts Receivable 300
e.    Cash in Bank 2,925
Accounts Payable 2,925
Source: AUDPROB | Audit of Cash & Cash Equivalents | SureCPAiPASS2021 | jipb162021