Intermediate Accounting 1

Proof of Cash

1. The Baby Company provided the following data for the month of July:
Cash in Bank
Balance June 30 1,000,000
Book debits for July including June CM for note collected, P300,000 4,000,000
Book credits for July including June NSF of P100,000 and service charge of P4,000 3,600,000

Bank statement for July

Balance June 30 1,650,000
Bank debits for July including service charge of P1,000 and June outstanding 2,500,000
checks of P854,000
Bank credits for July including CM for bank loan of P500,000 and June deposit in 3,500,000
transit of P400,000
Required: Prepare bank reconciliation on June 30 and July 31, and adjusting entries on July 31.

2. The Bull Company provided the following information:

Balance per book October 31 600,000
Receipts per book for November (collection from customer, P100,000 recorded as 2,200,000
P10,000)
Disbursements per book for November (check for P300,000 in payment of account 1,800,000
recorded as P30,000)
Balance per bank statement November 30 930,000
Deposit in transit October 31 300,000
Outstanding checks November 30 400,000
Bank receipts for November including an erroneous credit of P100,000 which should 2,500,000
have bene credited to The Sun Company
Bank disbursements for November including check of The Sun Company, P200,000 1,970,000
Required: Prepare bank reconciliation on October 31 and November 30, and adjusting entries on
November 30.

3. The Hamster Company showed the following information:

Cash in bank balance, March 31 200,000
Book credits for April 720,000
Book debits for April 800,000

Bank statement balance, March 31 330,000

Bank debits 530,000
Bank credits 700,000

Note collected by bank:

March 60,000
April 100,000

Service Charge:
March 8,000
April 2,000
Intermediate Accounting 1 – Cash and Cash Equivalents Part 3
 NSF Check:
March 20,000
April 30,000

Deposit in Transit:
March 31 80,000
April 30 220,000

Outstanding check:
March 31 178,000
April 30 372,000
Required: Prepare a proof of cash for the month of April.

4. The Moose Company provided the following data concerning the cash records for the months of
September and October:
September 30 October 31
Book balance 1,900,000 ?
Total cash receipts per book 1,400,000
Total cash disbursements per book 2,400,000

Bank balance 2,100,000 ?

Total charge in bank statement 2,500,000
Total credits in bank statement 1,200,000

NSF check 60,000 40,000

Collections of accounts receivable not recorded by 30,000 50,000
entity (corrected in subsequent month)
Overstatement of check in payment of salaries 90,000 120,000
(corrected in subsequent month)
Deposit in Transit 130,000 260,000
Outstanding checks 270,000 30,000
Required:
a. Prepare a four-column reconciliation showing adjusted balances.
b. Prepare adjusting entries on October 31.

5. The Pepper Company provided the following information:

May 31 June 30
Balance per bank statement 2,700,000 ?
Balance per general ledger 2,500,000 ?
Deposit on bank statement 5,500,000
Charges on bank statement 5,600,000
Cash receipts per book 5,300,000
Cash payments per book 5,400,000
Bank service charge 20,000 25,000
NSF customer check 200,000
Interest on bond investment collected and credited by bank to 75,000
entity’s account
Intermediate Accounting 1 – Cash and Cash Equivalents Part 3
 Check of P600,000 issued in June for equipment incorrectly 900,000
recorded by the entity as
Deposit in transit 625,000 500,000
Outstanding checks 845,000 550,000
Required:
a. Prepare a four-column bank reconciliation showing adjusted balances.
b. Prepare adjusting entries on June 30.

6. In reconciling the Cash in bank of Inner Company with the bank statement balance for the month of
November 2018, the following data are summarized:
Total book receipts – November P800,000
Bank receipt – November 900,000
Credit memo for note collection:
October 60,000
November 75,000
Credit memo for November bank loan 100,000
Deposit in transit for October
120,000
Erroneous bank credit for November 25,000
Erroneous bank credit for October corrected by bank in November 50,000
Erroneous book credit during November 5,000
Erroneous book credit during October corrected by the Company during November 10,000
Debit memo for service charge - October 6,000
Debit memo for service charge – November 8,000
Erroneous book debit – November 20,000
Erroneous bank debit – November 65,000
Book disbursement – November 600,000
Bank disbursement – November 700,000
Outstanding check – October 80,000
Required:
a. What is the amount of outstanding checks for November?
b. How much is the deposit in transit for the month of November?
c. What is the adjusted amount of receipt for the month of November?
d. What is the adjusted amount of disbursement for the month of November?

7. The following data are assembled by the accountant of Angel Trading:

Nov. 30, 2023 Dec. 31, 2023
Balance per accounting records 16,470 40,285
Balance per bank statement 107,082 137,817
Undeposited collections 8,201 12,880
Unpresented checks 27,718 30,112
Bank charges 720 600
DAUD* - 8,250
Notes placed in the bank for collection, collected by the bank 71,815 80,900

*Redeposited in the same month. No entries are made to book the return and redeposit. (Assume that these are to
be treated as book reconciling items)

The bank statement and the company’s cash records show the following totals:
Intermediate Accounting 1 – Cash and Cash Equivalents Part 3
 Debits per bank statement 218,373
Credits per bank statement 249,108
Cash collections per cash book 164,637
Checks written per cash book 211,917
Required:
1. What is the total book debits in December?
2. What is the total book credits in December?
3. What is the adjusted cash balance in November?
4. What is the adjusted bank receipts in December?
5. What is the adjusted book disbursements in December?
6. What is the adjusted cash balance in December?

Intermediate Accounting 1 – Cash and Cash Equivalents Part 3