Republic of the Philippines

CAMARINES NORTE STATE COLLEGE

F. Pimentel Avenue, Brgy. 2, Daet, Camarines Norte – 4600,
Philippines

COLLEGE OF BUSINESS AND PUBLIC ADMINISTRATION

Intermediate Accounting 1
Accounting for Cash

Instruction: Answer and write your solution neatly.

Problem 1. In preparing its bank reconciliation for the month of April 2021, ABC company has the
following information.

Balance per bank statement 4/30/2021 341,400 or 344,000

NSF returned with 4/30/2021 bank statement 4,500
Deposit in transit 4/30/2021 50,000
Outstanding checks 4/30/21 52,000
Bank service charges 20
What should be the correct balance of cash at April 30,2021?

Balance per bank statement 341,400

Add: DIT 50,000
Less: OC 52,000
Correct Bank Balance 339,400

Problem 2. XYZ Company has a 2,000,000 cash balance per books, 521,000 deposit in transit, 543,000
outstanding checks, 591,000 notes collected by the bank from the entity’s customers, 1,200 bank service
charge and 88,400 DAIF check. What is the adjusted cash balance?

Balance per book 2,000,000

Add: Notes collected by bank 591,000
Less: Bank service charge 1,200
DAIF check 88,400
Adjusted book balance 2,501,400

Problem 3. DEF Company has 1,487,000 cash balance per bank statement, 533,000 deposit in transit,
233,000 NSF check, 205,000 erroneous credit by the bank to the entity account, and 221,000
outstanding check. What is the adjusted cash balance?

Balance per bank statement 1,487,000

Add: DIT 533,000
Less: OC 221,000
Erroneous credit 205,000
Adjusted bank balance 1,594,000
 Republic of the Philippines
CAMARINES NORTE STATE COLLEGE
F. Pimentel Avenue, Brgy. 2, Daet, Camarines Norte – 4600,
Philippines

COLLEGE OF BUSINESS AND PUBLIC ADMINISTRATION

Problem 4. On March 3,2021, Angel Company received its bank statement. However, the closing balance
of the account was unreadable. Attempts to contact the bank after the hours did not secure the desired
information. Thus, you had to prepare a bank reconciliation from the available information summarized
below:

February 28 book balance 1,460,000

Note collected by bank 100,000
Interest earned on note 10,000
NSF check of customer 130,000
Bank service charge on NSF check 2,000
Other bank service charges 3,000
Outstanding checks 202,000
Deposits of February 28 placed in night depository 85,000
Check issued by Angelo Company charged to Angel’s account 20,000
What was the cash balance per bank statement?

Balance per book 1,460,000

Add: Note Collected 100,000
Interest Earned on note 10,000
Less: NSF check 130,000
Bank service charge 2,000
Other bank service charges 3,000
Adjusted book balance 1,435,000

Balance per bank statement 1,532,000 (Squeeze)

Add: DIT 85,000
Erroneous Debit 20,000
Total 1,637,000
Less: OC 202,000
Adjusted book balance 1,435,000

Problem 5. Burr Company had the following account balances at year-end:

Cash in bank 2,250,000
Cash on hand 125,000
Cash restricted for addition to
Plant and expected to be disbursed next year 1,600,000
Cash in bank included 600,000 of compensating balance against short term borrowing arrangement.
The compensating balance is not legally restricted as to withdrawal. What total amount of cash should
be reported under current assets at year-end?

Cash in Bank 2,250,000

Cash on Hand 125,000
Cash 2,375,000
 Republic of the Philippines
CAMARINES NORTE STATE COLLEGE
F. Pimentel Avenue, Brgy. 2, Daet, Camarines Norte – 4600,
Philippines

COLLEGE OF BUSINESS AND PUBLIC ADMINISTRATION

Balance per bank 2,800,000

Add: DIT 350,000
Less: OC 650,000
Adjusted Bank Balance 3,500,000

Cash balance per ledger 3,520,000 (squeeze)

Add: Interest earned 10,000
Total 3,530,000
Less : Bank charges 12,000
Understated checks 18,000
Adjusted Book Balance 3,500,000

Balance per bank statement 2,000,000

Add: DIT 200,000
Less: OC (500,000 – 100,000) 400,000
Erroneous credit 300,000
Adjusted Bank Balance 1,500,000
 Republic of the Philippines
CAMARINES NORTE STATE COLLEGE
F. Pimentel Avenue, Brgy. 2, Daet, Camarines Norte – 4600,
Philippines

COLLEGE OF BUSINESS AND PUBLIC ADMINISTRATION

Book balance 850,000

Add: note collected net of bank charge 750,000
Less: NSF check (150,000 – 50,000) 100,000
Adjusted book balance 1,500,000

June 30 Receipt Disbursement July 31

Book Balance 8,800,000 7,300,000 8,600,000 7,500,000

Adjusted Bank Bal 8,800,000 7,300,000 8,600,000 7,500,000

Bank Balance 9,800,000 6,500,000 9,000,000 7,300,000

DIT
June 400,000 (400,000)
July 1,200,000 1,200,000
OC
June (1,400,000) (1,400,000)
July 1,000,000 (1,000,000)
Adjusted Bank Bal 8,800,000 7,300,000 8,600,000 7,500,000