PROBLEM 2-4

a. Book balance 1,405,000

Add: Collection of note 2,500,000

Interest on note 150,000
Error on check No.175 45,000 2,695,000

Less: Bank service charge 5,000

NSF check 220,000
Preauthorized payment
for light and water 245,000 (470,000)
Adjusted book balace 3,630,000

Bank balance 5,630,000

Add: March 31 deposit 750,000
Less: Erroneous bank credit 1,100,000
Outstanding checks 1,650,000 (2,750,000)
Adjusted bank balace 3,630,000

b. Adjusting Entries:
Cash 2,650,000
Notes Receivable 2,500,000
Interest income 150,000
Cash 45,000
Accounts Payable 45,000
Bank service charge 5,000
Cash 5,000
Accounts Receivable 220,000
Cash 220,000
Utilities expense 245,000
Cash 245,000
PROBLEM 2-5
Book balance, March 31 800,000
Add: Cash receipts, April 4,100,000
Outstanding checks:
No. 1331 40,000
No. 1332 30,000
No. 1334 60,000
No. 1335 10,000
Note collected 60,000 4,300,000

Less: Cash disbursements, April 3,800,000

Undeposited collections 270,000
NSF check 25,000
Bank service charge 5,000 4,100,000
Bank balance, April 30 1,000,000

Adjusting Entries:
Cash 60,000
Notes Receivable 60,000
Accounts Receivable 25,000
Cash 25,000

Bank service charge 5,000

Cash 5,000
PROBLEM 2-6
a. Balance per bank statement 3,500,000
Undeposited collections 550,000
Outstanding checks (650,000)
Adjusted bank balance 3,400,000

Balance per book (SQUEEZE) 3,130,000

Add: Customer’s check 180,000
Creditor’s check 270,000450,000

Less: NSF checks 50,000

Safety deposit box rental 5,000
Unrecorded check 125,000(180,000)
Adjusted book balance 3,400,000

b. Accounts Receivable 50,000

Cash 50,000

Bank service charge 5,000

Cash 5,000
Cash 180,000
Accounts Receivable 180,000
Accounts Payable 125,000
Cash 125,000
PROBLEM 2-7
a. Balance per bank statement 4,000,000
Add: Deposit in transit 475,000
Understated deposit 90,000
Incorrect bank debit 150,000
Erroneous debit memo 200,000 915,000

Less: Outstanding checks 600,000

Incorrect bank credit 300,000 (900,000)
Adjusted bank balance 4,015,000

Balance per book 2,700,000

Add: Proceeds of bank loan 940,000
Note collected by bank 435,0001,375,000

Less: Technically defective check 50,000

Bank service charge 10,000 (60,000)
Adjusted book balance 4,015,000

b. Cash 435,000
Accounts Receivable 435,000

Cash 940,000
Discounts on Loans Payable 60,000
Loans Payable 1,000,000
Accounts Receivable 50,000
 Cash 50,000
Bank service charge 10,000
Cash 10,000
Cash 435,000
Bank service charge 5,000
Notes Receivable 400,000
Interest income 40,000
PROBLEM 2-8
a. Cash balance per ledger 5,000,000
Proceeds of bank loan 516,000
Petty cash fund (10,000)
Erroneous check (180,000)
Adjusted cash balance 5,326,000

Cash balance per bank statement 5,500,000

Undeposited collections 300,000
Deposit omitted 150,000
Erroneous bank debit 50,000
Erroneous bank credit (130,000)
Outstanding checks (544,000)
Adjusted cash balance 5,326,000

b. Cash 326,000
Petty cash 4,000
Supplies 2,000
Transportation 3,000
Postage 1,000
Discount on Loans Payable 77,000
Interest expense 7,000
Accounts Payable 180,000
Loans Payable 600,000

PROBLEM 2-9
a. Balance of cash in bank account 1,300,000
Check No. 555 stopped payment 10,000
Overstatement of check No. 765 20,000
Bank service charge (5,000)
NSF check (85,000)
Adjusted balance 1,200,000

Balance of bank statement 1,200,000

Deposit in transit 235,000
Outstanding checks:
No. 761 55,000
762 40,000
763 25,000
764 65,000
765 50,000 (235,000)
Adjusted balance 1,200,000

b. Bank service charge 5,000

Cash 5,000
Accounts Receivable 85,000
Cash 85,000
Receivable to cashier 40,000
 Cash 40,000
Cash 10,000
Accounts Payable 10,000
Cash 20,000
Accounts Payable 20,000

PROBLEM 2-10
Balance per bank statement 1,805,000
Deposit in transit 325,000
Outstanding checks (275,000)
Adjusted cash in bank 1,855,000 – A

PROBLEM 2-11
Balance per book 850,000
NSF checks (100,000)
Proceeds of note collected by bank 750,000
Cash in bank 1,500,000 – A

PROBLEM 2-12
Bank balance 3,800,000
Deposit in transit 520,000
Outstanding checks (675,000)
Erroneous bank credit (40,000)
Adjusted bank balance 3,605,000

Book balance (SQUEEZE) 3,660,000 – B

NSF check (50,000)
Bank service charge (5,000)
Adjusted book balance 3,605,000

PROBLEM 2-13
Feb 28 book balance 1,460,000
Note collected by bank 100,000
Interest earned on note 10,000
NSF check (130,000)
Bank service charge on NSF check (2,000)
Other bank service charge (3,000)
Adjusted book balance 1,435,000

Cash balance per bank statement (SQUEEZE) 1,530,000 – B

Deposit in transit 85,000
Outstanding checks (200,000)
Erroneous bank debit 20,000
Adjusted bank balance 1,435,000

PROBLEM 2-14
Book balance 920,000
Bank service charge (15,000)
NSF check (40,000)
Unrecorded customer check 35,000
Adjusted cash in bank 900,000 – A

PROBLEM 2-15
Balance per bank 2,800,000
Deposits in transit 350,000
Outstanding checks (650,000)
Adjusted bank balance 2,500,000
Cash balance per ledger (SQUEEZE) 2,520,000 – B
Bank service charge (12,000)
Interest paid by bank 10,000
Erroneous check (18,000)
Adjusted book balance 2,500,000

PROBLEM 2-16
1. Cash balance 8,500,000
Credit memo 950,000
Erroneous check (180,000)
NSF check (250,000)
Bank service charge (20,000)
Cash in bank, June 30 9,000,000 – C

2. Cash balance 8,500,000

Net effect: 500,000 – C
Cash in bank, June 30 9,000,000

PROBLEM 2-17
1. Cash balance per ledger (SQUEEZE) 2,120,000 – A
Proceeds of bank loan 500,000
Proceeds of customer note 435,000
DAIF check (50,000)
Bank service charge (5,000)
Correct cash balance 3,000,000

2. Cash per bank statement (SQUEEZE) 3,070,000 – B

Deposit in transit 450,000
Outstanding checks (700,000)
Incorrect deduction 180,000
Correct cash balance 3,000,000

PROBLEM 2-18
1. Cash per bank statement 8,000,000
Deposit in transit 1,200,000
Outstanding checks (1,300,000)
Erroneous bank credit (150,000)
Adjusted cash in bank 7,750,000 – A

2. Cash per ledger (SQUEEZE) 7,070,000 – A

Note collected by bank 1,100,000
Service charge (20,000)
NSF checks (500,000)
Erroneous check 100,000
Adjusted cash in bank 7,750,000

3. Adjusted cash in bank 7,750,000

Currency and coins 900,000
Petty cash fund 50,000
Cash 8,700,000 – A

PROBLEM 2-19
1. Balance, July 1 550,000
Deposits 1,800,000
Checks processed (1,400,000)
Bank debits:
Service charge (30,000)
NSF check (120,000)
Reduction of loan (100,000)
Balance per bank, July 31 700,000 – A
 2. Balance, July 31 700,000
Deposits in transit 100,000
Overstated disbursement 270,000
Outstanding check (150,000)
Cash in bank, July 31 920,000 - B

3. Balance, July 31 990,000 - C

Service charge (30,000)
NSF check (120,000)
Reduction of loan (100,000)
Erroneous record 180,000
Cash in bank per ledger, July 31 920,000

PROBLEM 2-20
1. D
2. A
3. C
4. B
5. D
6. A
7. B
8. D
9. D
10. A