Problem #01: Sunny Company maintains cash in SNSD Bank.

The
following information was made available for the month of January 3. Book-to-Bank Method
2024. Sunny Company
 The bank statement at the end of the month shows P10,000. Bank Reconciliation Statement
 Deposits not yet reflected in the bank statement, P84,000. January 31, 2024
 Checks issued but not yet encashed by the holders that are Ledger Balance P 12,000
already recorded as a credit to the cash-in-bank, P65,000 Add: Notes Collected by the Bank 16,000
 The bank made an error of debiting the account of Sunny Add: Interest Earned 5,000
Company which was actually a debit for Somi Company, P4,000. Less: Bank Service Charges - 1,000
 The ledger shows a cash-in-bank balance of P12,000. Less: NSF Checks - 7,000
 Notes receivable collected by the bank for Sunny amounted to Add: Book Error 8,000
P16,000. Less: Deposits in Transit - 84,000
 Interest earned by Sunny from keeping their cash at SNSD Bank Add: Outstanding Checks 65,000
is P5,000. Less: Bank Error - 4,000
 SNSD Bank charged Sunny P1,000 service charges directly Bank Statement Balance P 10,000
debited to their account as seen in the bank statement.
 Sunny Received a check from Jiyeon Company amounting to
P7,000 but it was drawn against insufficient funds. Problem #02: Intermediate Accounting 1, 2019 edition (Valix, Peralta, Valix)
 There was a bank-related transaction that erroneously credited Bank of the Islands - Apathy Company (Account 100678988781)
the ledger balance of cash-in-bank account amounting to Check
Date Withdrawal Deposits Balance
P8,000. No.
Prepare a BANK RECONCILIATION STATEMENT Dec 2 100,000 100,000
1. Adjusted Balance Method Dec 18 104 10,000 90,000
Sunny Company Dec 20 101 5,000 85,000
Bank Reconciliation Statement Dec 22 106 25,000 60,000
January 31, 2024 Dec 27 50,000 110,000
Bank Statement Balance P 10,000 Dec 29 10,000 120,000
Add: Deposits in Transit 84,000 Dec 29 103 40,000 80,000
Less: Outstanding Checks - 65,000 Dec 29 CM 30,000 110,000
Add: Bank Error 4,000 Dec 31 SC-DM 2,000 108,000
Adjusted Cash-in-Bank Balance P 33,000
Cash In Bank - Bank of the Islands 100678988781
Ledger Balance P 12,000 DEC 01 Deposit 100,000 DEC 04 CHK 101 5,000
Add: Notes Collected by Bank 16,000 DEC 21 Deposit 50,000 DEC 06 CHK 102 15,000
Add: Interest Earned 5,000 DEC 27 Deposit 10,000 DEC 08 CHK 103 40,000
Less: Bank Service Charges - 1,000 DEC 31 Deposit 80,000 DEC 08 CHK 104 10,000
Less: NSF Checks - 7,000 DEC 10 CHK 105 30,000
Add: Book Error 8,000 DEC 14 CHK 106 25,000
Adjusted Cash-in-Bank Balance P 33,000 DEC 28 CHK 107 50,000
Adjusting Entries
Cash-in-Bank 16,000 Adjusted Balance Method
Notes Receivable 16,000 Balance per bank statement Balance per books
＋ Deposit in Transit ＋ Credit Memos
Cash-in-Bank 5,000 － Outstanding Checks － Debit Memos
Interest Revenue 5,000 = Adjusted Balance = Adjusted Balance
Solution:
Bank Service Charges 1,000 Balance per bank statement P 108,000
Cash-in-Bank 1,000 ＋ Deposit in Transit 80,000
－ Outstanding Checks (95,000)
Accounts Receivable 7,000 = Adjusted Balance P 93,000
Cash-in-Bank 7,000
Balance per books P 65,000
Cash-in-Bank 8,000 ＋ Credit Memos 30,000
Miscellaneous Account 8,000 － Debit Memos (2,000)
2. Bank-to-Book Method = Adjusted Balance P 93,000
Sunny Company
Bank Reconciliation Statement
January 31, 2024
Bank Statement Balance P 10,000
Add: Deposits in Transit 84,000
Less: Outstanding Checks - 65,000
Add: Bank Error 4,000
Less: Notes Collected by the Bank - 16,000
Less: Interest Earned - 5,000
Add: Bank Service Charges 1,000
Add: NSF Checks 7,000
Less: Book Error - 8,000
Ledger Balance P 12,000
Problem #03: You are attempting to determine an apparent cash Problem #04: Kitty Company had the following information:
shortage that you believe resulted from an employee’s theft with the Apr 30 May 31
help of the cash custodian. The following information is available for Bank statement balance 2,756,000 3,471,000
your audit: Deposits in transit 40,000 65,000
 The ledger in October 1, 2023 shows a balance of P7,435,000 Outstanding checks 80,000 22,000
 The bank statement shows a balance of P7,192,000 Credits in the bank statement for May 4,000,000
 Cash receipts during the month amount to P2,960,000 Debits in the bank statement for May 3,285,000
 Cash disbursements amount to P2,745,000 Ledger balance 2,352,000 3,185,000
 A deposit of P1,250,000 on Oct 31 does not appear in the BS Notes collected by the bank 382,000 356,000
 The bank collected notes amounting to P890,000 Interest earned 30,000 16,000
 Checks Outstanding, P400,000 NSF checks 40,000 25,000
 NSF Checks, P345,000 Bank service charges 8,000 18,000
 Service Charges, P18,000 Cash receipts during May 4,065,000
 The firm discovered that a check written in October for P200,000 Cash disbursements during May 3,232,000
payment of an account payable has been recorded in the books Prepare the entity’s proof of cash
at only P20,000
How much is the suspected cash shortage? Solution:
KITTY COMPANY
Solution: Proof of Cash
Bank Statement Balance, October 31, 2023 P 7,192,000 For the month of May
April 30 Recs. Disburs. May 31
Add: Deposits in Transit 1,250,000
Bank statement balance 2,756,000 4,000,000 3,285,000 3,471,000
Less: Outstanding Checks - 400,000 Deposits in transit
Adjusted balance per bank P 8,042,000 April 30 40,000 (40,000)
May 31 65,000 65,000
Ledger Balance, October 1, 2023 P 7,435,000 Outstanding Checks
Add: Cash Receipts during October 2,960,000 April 30 (80,000) (80,000)
Less: Cash Disbursements during October 2,745,000 May 31 22,000 (22,000)
Adjusted balances 2,716,000 4,025,000 3,227,000 3,514,000
Ledger Balance, October 31, 2023 7,650,000
Add: Notes Collected by the Bank 890,000
Ledger balance 2,352,000 4,065,000 3,232,000 3,185,000
Less: NSF Checks - 345,000 Notes collected by bank
Less: Bank Service Charges - 18,000 April 30 382,000 (382,00)
Re-add: Erroneous Check Payment Recorded 20,000 May 31 356,000 356,000
Less: Correct Check Payment Amount - 200,000 Interest Earned
Adjusted balance per book P 7,997,000 April 30 30,000 (30,000)
May 31 16,000 16,000
NSF Checks
Adjusted balance per bank P 8,042,000 April 30 (40,000) (40,000)
Adjusted balance per book 7,997,000 May 31 25,000 (25,000)
Suspected cash shortage P 45,000 Bank service charges
April 30 (8,000) (8,000)
May 31 18,000 (18,000)
Adjusted balances 2,716,000 4,025,000 3,227,000 3,514,000