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Problem 2

The bookkeeper's bank reconciliation for MART CORPORATION for the year ended December 31, 2008 showed discrepancies between the bank statement balance and general ledger balance. The auditor gathered additional information showing errors in the deposit in transit amount, outstanding checks, and a postdated check received from a customer that was not accounted for properly.

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LouisAnthonyHabaradasCantillon
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793 views1 page

Problem 2

The bookkeeper's bank reconciliation for MART CORPORATION for the year ended December 31, 2008 showed discrepancies between the bank statement balance and general ledger balance. The auditor gathered additional information showing errors in the deposit in transit amount, outstanding checks, and a postdated check received from a customer that was not accounted for properly.

Uploaded by

LouisAnthonyHabaradasCantillon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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You are conducting an audit of the MART CORPORATION for the year ended December 31, 2008.

The
internal control procedures surrounding cash transactions were not adequate. Jane Quipit, the
bookkeeper-cashier handles cash receipts, maintains accounting records and prepares the monthly
reconciliations of the bank account. She prepared the following reconciliation at the end of the year:
Balance per bank statement P 315,000
Add : Deposit in transit P 157,725
Note collected by bank 13,500 171,225
Balance P 486,225
Less : Outstanding checks 222,075
Balance per general ledger P 264,150
In the process of your audit, you gathered the following:
a. At December 31, 2008, the bank statement and the general ledger showed balances of P315,000
and P264,150 respectively.

b. The cut off bank statement showed a bank charge on January 02, 2009 for P35,250 representing a
correction of an erroneous bank credit.

c. Included in the list of outstanding checks were the following:


1. A check payable to a supplier, dated December 29, 2008, in the amount of P13,275,
released on January 05, 2009.
2. A check representing advance payment to a supplier in the amount of P33,489, the
date of which is January 04, 2009, and released in December 2008.

d. On December 31, 2008, the company received and recorded customer’s postdated
check amounting to P45,000.

Compute for:
1. Adjusted deposit in transit as of December 31, 2008.
2. Adjusted outstanding checks as of December 31, 2008.
3. Adjusted cash to be presented in the balance sheet as at Dec. 31,
2008.

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