Problem 3-6 (IAA)

Book to bank method

Bigotry Company
Proof of Cash
For the month of August

July 31 Receipts Disbursements August 31

Balance per book 2,400,000 4,400,000 3,600,000 2,000,000
Note collected:
July 200,000 (200,000)
August 300,000 300,000
NSF check:
July (100,000) (100,000)
August 50,000 (50,000)
Deposit in transit:
July (600,000) 600,000
August (480,000) (480,000)
Outstanding checks:
July 100,000 100,000
 August (650,000) 650,000
Understated book debit:
August 180,000 180,000
Understated book credit:
August 540,000 (540,000)
Erroneous bank credit:
August 200,000 200,000
Erroneous bank credit:
August 400,000 (400,000)
Balance per bank 2,000,000 5,000,000 3,940,000 1,860,000

Problem 3-7 (IAA)

Adjusted Balance Method
 Bedlam Company
Proof of Cash
For the month of December

November 30 Receipts Disbursements December 31

Balance per book 2,032,000 2,568,000 1,440,000 3,160,000
Note collected:
November (200,000) 200,000
December (300,000) (300,000)
Service charge:
November (2,000) (2,000)
December 4,000 (4,000)

Adjusted book balance 1,830,000 2,468,000 1,442,000 2,856,000

Balance per bank 1,890,000 2,090,000 1,080,000 2,900,000

Deposit in transit:
 November 80,000 (80,000)
December 498,000 498,000
Outstanding checks:
November (180,000) (180,000)
December 592,000 (592,000)
Erroneous bank charge:
November 40,000 (40,000)
December (50,000) 50,000

Adjusted bank balance 1,830,000 2,468,000 1,442,000 2,856,000

Adjusting Entry
December 31 Bank Service Charge 4,000
Note Receivable 300,000
Cash in Bank 304,000