4.

Cash and cash equivalents

a. P2,914,700 c. P3,052,000
b. P3,074,900 d. P3,066,000

Problem 4
The Cash in Bank account of Yves Company disclosed a balance of P203,000 as of December 31, 2020.
The bank statement as of December 31, 2020 showed a balance of P106,000. Upon comparing the bank
statement with cash records, the following facts were developed:

a. The company’s account was charged on December 26 for a customer’s uncollectible check amounting
to P30,000.

b. A P60,000 customer’s note dated November 25, discounted on December 12, was dishonored on
December 25, and the bank charged the company P62,000, which included a protest fee of P2,000.

c. A customer’s check for P15,400 was entered as P14,500 by both the depositor and the bank but was
later corrected by the bank.

d. Check no. 142 for P12,425 was entered in the cash disbursements journal at
P12,245 and check no. 156 for P3,290 was entered as P32,900.

e. Bank service charges of P1,830 for December were not yet recorded on the books.

f. A bank memo stated that a customer’s note for P25,000 and interest of P1,000 had been collected on
December 28; and the bank charged P500. (No entry was made on the books when the note was sent
to the bank for collection).

g. Receipts on December 31 for P24,000 were deposited on January 2.

h. The following checks were outstanding on December 31:

No. 123 P3,000 No. 154 P4,000

143 * 2,000 157 6,000
144 7,000 159 7,000
147 3,000 169 5,000
* Certified by the bank in December

i. A deposit of P20,000 was recorded by the bank on December 5, but it should have been recorded for
Yboss Company rather than Yves Company.

j. Petty cash of P10,000 was included in the Cash in Bank balance.

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k. Proceeds from cash sales of P60,000 for December 18 were stolen. The company expects to recover
this amount from the insurance company. The cash receipts were recorded in the books, but no entry
was made for the loss.

l. The December 21 deposit included a check for P20,000 that had been returned on December 15
marked NSF. Yves Company had made no entry upon return of the check. The redeposit of the
check on December 21 was recorded in the cash receipts journal of Yves Company as a collection on
account.

1. How much is the adjusted cash balance as of December 31, 2020?

a. P60,000 c. P80,000
b. P75,000 d. P85,000

Problem 5
You were able to obtain the following information during your audit of Jayson Company:

Reconciling items:
November 30 December 31
Undeposited collections P200,000 P120,000
Outstanding checks 80,000 60,000
Customer’s notes collected by bank 100,000 120,000
Bank service charges 2,000 3,000
Erroneous bank debits 10,000 20,000
Erroneous bank credits 40,000 30,000
NSF checks not redeposited 5,000 7,000
Customer's check deposited December 10, returned
by bank on December 16 marked NSF, and
redeposited immediately; no entry made on books
for return or redeposit 10,000

Unadjusted balances:
Books ? 90,000
Bank 230,000 ?

December Transactions:
Bank Books
Receipts P420,000 P270,000
Disbursements 500,000 407,000

1. How much is the adjusted cash balance as of November 30, 2020?

a. P320,000 c. P340,000
b. P330,000 d. P350,000

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2. How much is the adjusted bank receipts for December?
a. P250,000 c. P290,000
b. P270,000 d. P310,000

3. How much is the adjusted book disbursements for December?

a. P410,000 c. P450,000
b. P430,000 d. P470,000

4. How much is the adjusted cash balance as of December 31, 2020?

a. P180,000 c. P210,000
b. P200,000 d. P225,000

Problem 6
In your audit of the cash account of Tabonchan Company, you are required to prepare a four-column
reconciliation of receipts, disbursements, and balances using the adjusted balance method and to submit
adjusting journal entries as of December 31, 2020.

November30 December 31
a) Balances per bank P14,010 P19,630
b) Balances per books 13,290 18,195
c) Deposits in transit 2,740 3,110
d) Outstanding checks 4,260 3,870
e) Bank collections not in books 1,200 1,600
f) Bank charges not in books 950 640

g. Of the checks outstanding on December 31, one check for P700 was certified at the request of the
payee.

h. Receipts for December, per bank statement – P281,070.

i. December disbursements, per cash journal – P274,635.

j. NSF check from customer was charged by the bank on December 28, and has not been recorded –
P800.

k. NSF check returned in November and recorded in December, P1,050.

l. NSF check returned and recorded in December, P900.

m. Check of Tabeen ChenCompany charged by the bank in error, P2,010.

n. Receipt on December 6 paid out in cash for travel expenses, P750.

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