PROOF OF CASH

Practical Exercises
1. Mcbride Company provided the following data pertaining to the cash transactions and
bank account for the month of May:
Cash balance per accounting record 1, 719,000
Cash balance per bank statement 3, 195,000
Bank service charge 10,000
Debit memo for the cost of printed checks delivered by
the bank; the charge has not been recorded in the
accounting record 12,000
Outstanding checks 685,000
Deposit of May 30 not recorded by bank until June 1 500,000
Proceeds of a bank loan on May 30, not recorded, net
of interest of P 30,000 570,000
Proceeds from a customer promissory note, principal
amount of P 800,000 collected by the bank not taken
up in the accounting record with interest 810,000
Check No. 1086 issued to supplier entered in the
accounting record as P 210,000 but deducted in
the bank statement at an erroneous amount of 120,000
Stolen check lacking an authorized signature deducted
from Mcbride’s account by the bank in error 80,000
Customer check returned by the bank marked NSF,
indicating that the customer balance was not
adequate to cover the check; no entry has been made
in the accounting record to record the returned check 77,000

What is the adjusted cash in bank?

a. P 3,000,000.00 c. P 3, 080,000.00
b. P 2, 910,000.00 d. P 2, 990,000.00

2. Jam Company provided the following bank reconciliation on May 31:

Balance per bank statement 2, 100,000

Deposit in transit 300,000
Checks outstanding (30,000)
Correct cash balance 2, 370,000

Balance per book 2, 372,000

Bank service charge (2,000)
Correct cash balance 2, 370,000

Data for the month of June:

 BANK BOOK
Checks recorded 2, 300,000 2, 360,000
Deposits recorded 1, 620,000 1, 800,000
Collection by bank (P 400,000 note plus
interest) 420,000 0
NSF check returned with June 30 statement 10,000
Balances 1, 830,000 1, 810,000

2.1 What is the amount of checks outstanding on June 30?

a. P 30,000.00 c. P 60,000.00
b. P 90,000.00 d. P 0.00

2.2 What is the amount of deposit in transit on June 30?

a. P 480,000.00 c. P 180,000.00
b. P 120,000.00 d. P 680,000.00

2.3 What is the adjusted cash in bank on June 30?

a. P 1, 810,000.00 c. P 2, 240,000.00
b. P 2, 220,000.00 d. P 2, 780,000.00

3. Bib Company is making four-column bank reconciliation at June 30 from the following
data. The amounts per bank statement were: Balance, May 31, P650, 000; June
Receipts, P 1,300,000; June Disbursements, P 1,100,000. The amounts per books were:
Balance, May 31, P763, 500; June Receipts, P 1,154,800; June Disbursements, P
1,123,500; Balance, June 30, P 794,800.
May 31 June 30
Deposits in transit 120,000 150,000
Outstanding checks 67,000 84,000
The bank overlooked a check for P7, 500 when
recording a deposit on June10
Note collected by bank, recorded after receiving
the bank statement 180,000
Service charge, recorded after receiving the bank
statement 4,500 6,000
NSF checks, recorded after receiving the bank
statement 56,000 48,000
Bib recorded a P 37,400 check received from a
customer in June as P 34,700.00

3.1 The corrected cash balance on June 30 is:

a. P 908,500.00 c. P923,500.00
b. P916,500.00 d. P 1,007,500.00

3.2 The correct June receipts is:

a. P 1,157,500.00 c. P 1,334,800.00
b. P 1,330,000.00 d. P 1,337,500.00
 3.3 The correct June disbursements:
a. P 1,083,000.00 c. P 1,125,000.00
b. P 1,117,000.00 d. P 1,130,000.00

4. In reconciling the book and bank balances of Pearl Corporation, you discover the
following for the month of December 2017:

Balance per bank statement P 60,000.00

Balance per books 14,000.00
Receipts of December 31, 2017 not deposited until
January 3, 2018 10,000.00
Bank service charges for December 100.00
A paid check for P 4,000.00 was recorded in the cash
book as P 400.00

Assuming no errors except as noted, the amount of outstanding checks is:

a. P 40,300.00 c. P 52,500.00
b. P 59,700.00 d. P 43,000.00

5. The following bank reconciliation is presented for the Pony Co. for the month of
November, 2017:

Balance per bank statement, 11/30/17 180,400

Add: Deposit in transit 41,500
Erroneous bank charge 15,000 56,500
Subtotal 236,900
Less: Outstanding checks 78,200
Balance per books, 11/30/17 158,700
Data for the month of December 2017 follow:
Per bank: December deposits/credits 261,000
December charges/debits 224,200
Balance, December 31, 2017 217,200

All items that were outstanding as of November 30 cleared through the bank in
December, including the bank charge. In addition, P25,000 in checks were outstanding as
of December 31, 2017.

5.1 What is the amount of cash disbursements per books in December 2017?
a. P 146,000 c. P 249,200
b. P 171,000 d. P 249,200

5.2 What is the amount of cash receipts per books in December 2017?
a. P 204,500 c. P 246,500
b. P 219,500 d. P 317,500