Solution to Problems 1- 8 Cash and Cash equivalents

Prob. 1
P 228,370

Problem 2
Cash - checking account 450,000
Cash on hand (135,000 - 20,000) 115,000
Cash money market account 850,000
Time deposit 3,500,000
4,915,000

Problem 3:
Cash in bank per bank statement 380,750
Deposit in transit 52,000
Otustanding checks (67,000 - 9,000) (58,500)
Erroneous bank credit ( 4,000)
Erroneous bank debit ( cehck of Golda) 12,000
382,250

Problem 4:
a) Adjusted balance method:
Per bank Per books
Unadjusted balances 892,346.30 590,884.60
Outstanding checks (333,788.20)
undeposited collections 53,172.00
Service charges (225)
proceeds loan 97,000
Returned check of Ours company (8,737.40)
Deposit omitted by bak 28,924.10
Error made by bank in recording deposit 10.00
Erroneous bank debit - check of young company 26,900.00
proceeds of note collected by bank 20,350.00
Erroneous bank debit memo 50,000.00
Error made by bank in recording deposit (100.00)
Error made by bank in recording deposit - deposit of Ours Co. (18,192.00) _________
699,272.20 699,272.20

Problem 5:
a.
Balance per bank statement 8,470,000
Add: Deposit in transit 950,000
Total 9,420,000
Less: Outstanding checks 270,000
Adjusted balance per bank 9,150,000

b.
Balance per bank statement 8,470,000
Add: Deposit in transit 950,000
Bank service charge 15,000
NSF check 250,000
Error in recording payment 45,000 1,260,000
Total 9,730,000
Less: Outstanding checks 270,000
note collected by bank 935,000 1,205,000
unadjusted book balance 8,525,000

c.
1) Cash 935,000
Notes receivable 900,000
Interest income 35,000
noted collected by bank.
 2) Accounts Payable 45,000
Accounts Receivable 250,000
Bank service charge 15,000
Cash 310,000
Error in recording payment, NSF check
and bank service charge.

Problem 6:
October 31 November November 30
Balance Cash receipts Cash Disbursements Balance
Balance per bank statement 180,000 275,000 220,000 235,000
Deposit in transit:
October 31 40,000 (40,000)
November 30 35,000 35,000
Outstanding checks
October 31 (60,000) (60,000)
November 30 25,000 (25,000)
Error bank credit (10,000) ________ (10,000) ________
Adjusted balances 150,000 270,000 175,000 245,000

October 31 November November 30

Balance Cash receipts Cash Disbursements Balance
Balance per books 150,000 220,000 138,500 231,500
Note collected by bank 50,000 50,000
NSF check 35,000 (35,000)
Bank service charge 1,500 (1,500)

Adjusted balances 150,000 270,000 175,000 245,000

Problem 7
Balance per bank statement 50,000
Add: deposit in transit 20,000
Total 70,000
Less: ourstanding check 15,000
Adjusted bank balance 55,000

Balance per books 43,000

Note collected by bank 15,000
Interest income (squeezed figure) 3,000
Total 61,000
Less: service charge 6,000
Adjusted balance per books 55,000

Problem 8:
a) Deposit in transit October 31:
October deposits per books 490,000
Less: October deposits per bank 476,000
Less: deposit in transit Sept. 30 17,000 459,000
Deposit in transit Oct. 31 31,000

b) Outstanding checks, Oct. 31:

October Checks drawn per books 610,000
Less: October checks paid per bank 617,000
Less: outstanding checks , Sept. 30 39,000
error - check gran company 15,000 54,000 563,000
Outstanding checks October 31 47,000

To check: prepare the bak reconciliation:

 Per bank Per books
Unadjusted balances, Ooct. 31 801,200 599,400
Deposti in transit , Oct. 31 31,000
Outstanding checks (47,000)
Error - check of Gran company 15,000
Bank service charge (1,200)
note collected by bank ________ 202,000
800,200 800,200