PROBLEM APC – 04, DANICA COMPANY

During the audit of Danica Company, it was found out that the
accountant is not preparing bank reconciliation statement, thus,
disparity in the cash balances became rampant. In this regard, the
auditor verifies all the necessary information and documents that
would lead to the preparation of bank reconciliation statement. On
October 31, 2020, the bank statement for the checking account of
Danica Company shows a balance of P126, 300, while the company’s
records show a balance of P123, 310. Information that maybe helpful
in preparing bank reconciliation statement follows:

a) Outstanding checks are P14,300 which includes a

certified check of P2,000
b) On October 31, cash receipts of P7, 850 are not deposited
in the bank until November 2.
c) One check written in payment of utilities for P1, 370 is
correctly recorded by the bank but is recorded by Danica as a
disbursement of P1, 730.
d) In accordance with prior authorization, the bank
withdraws P6, 500 directly from the checking account as
payment of notes payable. The interest portion of that payment
is P500 and the principal is P6, 000. Danica has not recorded the
withdrawal.
e) Bank service charge of P240 was listed on the bank
statement.
PROBLEM APC – 05, AMANDA COMPANY

The company is under external audit with the cut-off date of

December 31, 2020. During the audit planning phase, the audit team
found out that the records are not in order, and the accountant is
misguided. As the auditor assigned to audit cash, you are given the
task to guide the accountant in the preparation of bank reconciliation
statement which she failed to do.

To cooperate with the auditors to fix the messy accounting

department, they gathered and presented the following information
and documents:

1. Balance per bank statement is P2,000,000

2. Balance per book is P1,350,000
3. Bank service charge is P5,000
4. Outstanding checks, P300,000
5. Deposit in transit, P237,500
6. Proceeds of bank loan on 12/01/20, discounted for six months at
12%, not recorded on Amanda’s books amounting to P470, 000.
7. Customer’s check charged back by bank for lack of signature,
P25,000
8. Check of Janice Company charged by the bank against Amanda’s
account, P75, 000.