MEC 54.

AUDIT OF CASH
The bank statement for the current account of Oracle Co. showed a December 31,
2018, balance of P585,284. Information that might be useful in preparing a bank
reconciliation is as follows:

a) Outstanding checks were P52,810

b) The December 31, 2018, cash receipts of P23,000 were not deposited in the
bank until January 2, 2019.
c) One check written in payment of rent P8,940 was correctly recorded by the
bank but was recorded by Oracle Co. as a P9,840 disbursement.
d) In accordance with prior authorization, the bank withdrew P18,000 directly
from the current account as payment on a mortgage note payable. The interest
portion of that payment was P14,000. Oracle Co. has made no entry to record
the automatic payment.
e) Bank service charges of P740 were listed on the bank statement.
f) A deposit of P35,000 was recorded by the bank on December 12, but it did
not belong to Oracle Co.
g) The bank statement included a charge of P3,400 for a not-sufficient-fund
check. The company will seek payment from the customer.
h) Oracle Co. maintains an P8,000 petty cash fund that was appropriately
reimbursed at the end of December.
i) According to instructions from Oracle Co. on December 30, the bank withdrew
P40,000 from the account and purchased treasury bills for Oracle Co. The
company recorded the transaction in its books on December 31 when it
received notice from the bank. Half of the treasury bills mature in three
months and the other half in six months.
Required:
1. What is the cash in bank balance per books on December 31, 2018?
2. What is the adjusted cash in bank balance on December 31, 2018?
3. What amount of cash and cash equivalents should be shown under current
assets on December 31, 2018?

The following information pertains to Beihold Corp.:

Beihold Corp.
BANK RECONCILIATION
November 30, 2018

Balance per bank statement P435,000

Less: Outstanding checks
No. 4321 P6,000
4329 15,000
4340 1,700
4341 4,675 27,375
P407,625
Add: Deposit in transit 16,200
Balance per books P423,825

CHECK REGISTER
December 2018

Date Payee No. Vouchers Payable Discount Cash

Dec 1 San Beda, Inc. 4342 P10,000 P500 P9,500
3 Miriam Corp. 4343 4,200 - 4,200
 7 UE Enterprises 4344 3,755 - 3,755
12 PSBA Corp. 4345 12,000 120 11,880
15 Payroll 4346 96,000 - 96,000
16 BU, Inc. 4347 6,300 - 6,300
18 New Era Co. 4348 14,200 142 14,058
21 UST, Inc. 4349 7,000 - 7,000
22 Petty cash fund 4350 10,000 - 10,000
28 Payroll 4351 98,000 - 98,000
P261,455 P762 P260,693

BANK STATEMENT
BANKABLE BANK Page 1 of 1
PERIOD: NOVEMBER 30, 2018 – DECEMBER 31, 2018
No.: 001-43-44

Check
Date Description Number Debit Credit Balance
Balance last statement P435,000
Dec 1 Cash deposit P16,200 451,200
1 Check issued 4329 P15,000 436,200
4 Check issued 4342 9,500 426,700
4 Check issued 4341 4,675 422,025
5 Check deposit 49,000 471,025
6 Check issued 4343 4,200 466,825
8 Check deposit 14,000 480,825
10 Check issued 4344 3,755 477,070
15 Encashment 4346 96,000 381,070
22 Encashment 4350 10,000 371,070
28 Encashment 4351 98,000 273,070
29 Debit memo – service charge 1,000 272,070
29 Credit memo - interest 1,550 273,620

Deposits in transit at December 31 totaled P49,000.

Required:
1. What is the total book receipts for December?
2. What is the cas balance per books on December 31, 2018?
3. What is the total outstanding checks on December 31, 2018?
4. What is the adjusted cash balance on November 30, 2018?
5. What is the adjusted cash balance on December 31, 2018?