Grace Co. supplies Mercy Co. with goods and services.

  Some of the services are on a

retainer contract basis and are collected in advance, while others are billed only upon
completion of the repairs.
In reply to your confirmation, Grace Co. provided you their statement of account of your
client, Mercy Co.  Below are reproduced three vouchers payable to Grace (the 1 st 2 for
2021 and the last for 2022 and the statement of account from Grace Co.

Mercy Company
Cash Voucher No. 12-700
Invoice No.  
120 P 2,400
128 500
Pay to:Grace Co
130 2,300
12 400
P 5,600
Accounts Debit Credit

Accounting Purchases P 5,100

Distribution: Repairs 500
Vouchers Payable P 5,600

Mercy Company
Cash Voucher
Pay to:Grace Co Invoice No. No. 12-750
141                     5,000
152                     6,000
CM No.          60                   (1,100)
                    9,900

Accounting
Accounts  Debit Credit
Distribution:

Purchases  P 3,900
Repairs 6,000
Vouchers Payable P 9,900
 Mercy Company
Cash Voucher
Invoice No.   No. 1 – 90 
160                     2,500
Pay to:Grace Co 175                       900
190                     4,900
Total 9,300
Accounts Debit Credit
Accounting
Purchases  9 300
Distribution:
Vouchers Payable 9 300

Grace Company
Statement of Account
With:Mercy Company Debit Credit Balance 
Balance, November 30,2021   10,000
Invoice No. 110     2,000
120     2,600
CR  12,000
Invoice No.                                                                                128     500
130   3,200         
CM No. 12 400
Invoice No.                                                                                141   5,500
152   6,000
157   7,000
160   2,500
175      900
190   4,900
Balance, December 31,2021   32,700

Voucher No. 12-700 was paid by the client on December 31,2021, but the supplier’s OR
was dated January 3, 2022.  You are examining the following documents:

Reference FOB Explanation Amount

 Number Date

Inv. No.             110 2-Dec Destination Merchandise  2,000

120 5-Dec Shipping point Merchandise 2,400

Prepaid freight 200

128 9-Dec -0- Repairs rendered 500

130 12-Dec Destination Merchandise 2,300

CM 12 15-Dec -0- Allowance for defective goods 400

Inv. No.             141 19-Dec Destination Merchandise 5,500

Collect freight 500

152 24-Dec -0- Repairs retainer fee for 2008 6,000

157 24-Dec Shipping point Chargeable to Merry 7,000

160 28-Dec Destination Merchandise, received Jan 4 2,500

CM 60 7-Jan -0- Allowance for invoice No. 141 1,100

Inv. No.             175 28-Dec -0- Repairs rendered, December 27 900

          190 31-Dec Shipping point Merchandise, received January 4 4,900

Prepaid freight  600

Required:
Prepare a reconciliation of the Mercy Company  records and Grace Company statement
to determine the adjusted balance as of December 31,2021 using the following format:

Per Records
Particulars Mercy
Grace Company
Company
Unadjusted Balances    
Adjustments:    
1.          
2.          
3.          
4.          
5.          
6.          
7.          
8.          
9.          
10.       
Adjusted Balances    

You are examining the accounts of Caleb Company.  The balance of the petty cash
account, December 31,2021, was P4,000.  Your count of the imprest cash fund, made
at 9:00 am on January 2,2022, in the presence of Hebron, petty cashier, revealed as
follows:
 

Coins Bills

Quantity Denomination Quantity Denomination

32 1.00 4 500
40 0.25 2 100
     10 20
    15 10 

Checks

Date Payee Maker Amount

Amor, Vice president

12/27 Cash 5,000
Joshua, employee
12/30 Cash 6,100
Ruth, customer
12/30 Caleb 6,500
Anna, customer
01/02 Caleb 1,560
Tony, employee (check received
01/15 Cash 1,000
December 27)

Unused stamps

Various denominations 50

Vouchers

Date Nature of disbursements  

12/15 Transportation 65
12/16 Office supplies 70
12/17 Photocopy fees 80
12/28 Postage 150
01 / 02 Newspapers 10
01 / 02 Freight bill on merchandise purchases 50
IOUs

Date Maker  
December 20 Rachel, employee 250
                   23 Amos, salesperson 100

Sales Invoices (for cash sales, all in cash, no checks)

Invoice No.  2017 December 30 4,000

          2018 December 31 5,100
          2019 January 02 3,050

 
Required:

1. Prepare audit working papers for petty cash.

2. Adjusting journal entries, December 31, 2021.