PRACTICE PROBLEMS – PROOF OF CASH

PROBLEM #1
Sassy Company provided the following data for the month of July:

Cash in bank
Balance, June 30 1,000,000
Book debits for July including June CM for note collected, P300,000 4,000,000
Book credits for July including June NSF of P100,000 and service charge of P4,000 3,600,000
Bank statement for July
Balance, June 30 1,650,000
Bank debits for July including service charge of P1,000 and June outstandig checks
of P854,000 2,500,000
Bank credits for July including CM for bank loan of P500,000 and June deposit in
transit of P400,000 3,500,000

REQUIRED:
a. Compute for deposit in transit, July 31
b. Compute for outstanding checks, July 31
c. Prepare bank reconciliation on June 30 and July 31. (Use proof of cash format)
d. Prepare adjusting entries on July 31

PROBLEM #2
Bigotry Company provided the following information:
Balance per book, August 31 2,000,000
Receipts per book for August 4,400,000
Disbursements per book for August 3,600,000

Balance per bank, August 31 1,860,000

Bank receipts for August 5,000,000
Bank disbursements for August 3,940,000

August collection of P200,000 recorded by entity as 20,000

August check in payment of account payable for P600,000 recorded by entity as 60,000
Deposit of Bigot Company erroneously credited by bank to Bigotry Company 200,000
August check of Bigot Company erroneously charged by bank to Bigotry Company 400,000
NSF check:
July 100,000
August 50,000

Note collected by bank for Bigotry Company:

July 200,000
August 300,000

Deposit in transit:
July 31 600,000
August 31 480,000

Oustanding checks:
July 31 100,000
August 31 650,000

REQUIRED:
a. Prepare a proof of cash for the month of August following the book to bank method.
b. Prepare a proof of cash for the month of August following the adjusted balance method.
PROBLEM #3
Bedlam Company provided the following data for the month of December:
November 30 December 31
Cash in bank account balance 2,032,000 3,160,000
Bank statement balance 1,890,000 2,900,000
Bank debits 1,080,000
Bank credits ?
Book debits ?
Book credits 1,440,000
Outstanding checks 180,000 592,000
Deposit in transit 80,000 498,000
Check erroneously charged by bank against entity's account and
corrected in subsequent month 40,000 50,000
Bank service charge 2,000 4,000
Note recorded as cash receipt by entity when placed with bank for
collection and note is actually collected by bank in subsequent month
and credited by bank to entity's account in same month 200,000 300,000

REQUIRED:
a. Prepare a four-column reconciliation (proof of cash) showing adjusted balances.
b. Prepare one adjusting entry only on December 31.