Use the following information for the next 2 questions:

1. For the year ended December 31, 2023, Agaton Co. initially reported P3,000,000 cash. Included in this
amount were the following checks from customers:
a) Check amounting to P100,000 and dated December 25, 2023 was received last December 1,
2023.
b) Check amounting to P300,000 and dated January 7, 2024 was received last December 10, 2023.
c) Check amounting to P300,000 and dated November 8, 2023 was received last December 10,
2023.
d) Check amounting to P300,000 and dated February 9, 2024 was received last November 17, 2023.
Compute the adjusted amount of cash to be reported by Agaton.

Solution:
Cash reported 3,000,000
a) -
b) (300,000)
c) -
d) (300,000)
Adjusted 2,400,000

Concept: post-dated check received

2. What if instead, none of these checks were initially included in the P3,000,000 balance? Compute the
adjusted amount of cash to be reported by Agaton.

Solution:
Cash reported 3,000,000
a) 100,000
b) -
c) 250,000
d) -
Adjusted 3,350,000

Concept: post-dated check received

3. As of December 31, 2023, Bisaya Co’s cash in bank account showed an unadjusted balance of
P4,500,000. Other relevant data pertaining to company’s issued checks are the following:
a) Check amounting to P175,000 and dated December 29, 2023 was deducted from the balance.
b) Check amounting to P235,000 and dated January 9, 2024 was deducted from the balance.
c) Check amounting to P105,000 and dated January 15, 2024 was still included in the balance.
Determine the adjusted amount of cash to be reported.

Solution:
Cash reported 4,500,000
a) -
b) 235,000
c)
Adjusted 4,735,000

Concept: post-dated check issued

4. Caloy-I Co. has the following information with regards to some of the checks it written during 2023, all
of which are dated 2023:
 a) Check amounting to P160,000 was delivered to payee on January 29, 2024. This was deducted
from the cash in bank balance.
b) Check amounting to P90,000 and dated December 10, 2023 was delivered to payee on December
29, 2023. The payee is yet to encash the check to the bank. This was deducted from the cash in
bank balance.
c) Check amounting to P315,000 was delivered to payee on January 2, 2024. This was not deducted
from the cash in bank balance.
Before considering the preceding items, the company reported P2,500,000 cash in the bank balance.
Compute the adjusted cash in bank balance that should be reported.

Solution:
Cash reported 2,500,000
a) 160,000
b)
c)
Adjusted 2,660,000

Concept: unreleased check

Use the following information for the next 2 questions:

5. Estoy Co. maintains the following bank accounts:
Checking account No. 00023, Alpha Bank 500,000
Checking account No. 00024, Alpha Bank (120,000)
Saving account No. 40021, Omega Bank (250,000)
Compute the amount of cash in bank to be reported by Estoy Co.

Solution: 500 – 120 = 380; 250 reported as current liability.

6. Compute the amount of cash in bank to be reported by Estoy Co, assuming that the bank overdraft is
part of the company’s cash management.

Solution: 500 – 120 – 250 = 130. As a rule, report the overdraft as current liability unless the overdraft is
part of cash management, offset it with other bank accounts.

7. As of December 31, 2022, Himala Co. reported the following unadjusted general ledger balance:
Cash on hand 1,500,000
Petty cash fund 60,000
Cash in bank 6,000,000
Cash funds 5,000,000
Cash equivalents 7,000,000
Total cash and cash equivalents 19,560,000
Other data regrading these balances are the following:
a) Included in the cash on hand are the following checks:
i. Customer check amounting to P200,000 dated January 31, 2023. (-200,000 PDC)
ii. Customer check amounting to P100,000 dated February 14, 2022. (-100,000 STALE
CHECK)
b) Based on the inspection on the petty cash fund, coins and currency amounted to P20,000, while
the remaining P40,000 are in the form of petty cash vouchers. (for audit trail)
c) Cash in bank included the following items:
Checking account No. 1, ETA Bank 4,000,000
Checking account No. 2, ETA Bank (1,000,000)
Checking account No. 1, GAMMA Bank (3,000,000)
 Checking account No. 2, GAMMA Bank 2,500,000 (500,000) CL
Time deposit, 12/1/2022 to 2/1/2023 3,500,000 (Cash equivalent)
Total cash in bank 6,000,000

d) Cash funds included the following amounts:

Business travel fund 300,000
Fund for machinery acquisition 1,000,000
Bond sinking fund (related bonds will mature on 2026) 2,000,000
Payroll fund 1,050,000
Other operating fund 650,000
Total cash funds 5,000,000

e) Cash equivalents included the following investments:

Investment Amount Original issue Date purchased Maturity date
date
Maney market 2,750,000 12/10/2022 12/10/2022 1/10/2023
placements
Commercial papers 3,000,000 6/15/2022 6/15/2022 1/15/2023
Treasury bills 1,250,000 5/1/2022 11/30/2022 1/30/2023
Compute the adjusted cash and cash equivalents.

Solution:
Cash on hand 1,500,000 -200,000 – 100,000 1,200,000
Petty cash fund 60,000 -40,000 20,000
Cash in bank 4,000,000 -1,000,000 3,000,000
Cash funds 300,000 + 1,050,000 + 650,000 2,000,000
Cash equivalents 2,750,000+ 1,250,000 + 3,500,000 7,500,000
13,720,000
8. Pangasinan Co. had the following account balances on December 31, 2023:
Cash in bank – current account 5,000,000
Cash in bank – payroll account 1,000,000
Cash on hand 500,000
Cash in bank – restricted account for building construction expected to be disbursed in 3,000,000
2024
Time deposit, purchased December 15, 2023, and due on March 15, 2024 2,000,000
The cash on hand includes a P200,000 check payable to the company, dated January 15, 2024. What
total amount should be reported as cash and cash equivalents on December 31, 2023?

Solution:
Cash in bank – current account 5,000,000
Cash in bank – payroll account 1,000,000
Cash on hand (500,000 – 200,000) 300,000
Time deposit, purchased December 15, 2023 and due on March 15, 2024 2,000,000
Total cash and cash equivalents 8,300,000

9. The following information has been extracted from the accounting records of the Halili Co. at December
31, 2024:
Cash on hand (undeposited sales receipts) 40,800
Certificate of time deposit with maturity of 3 months 1,000,000
Customer’s not receivable 40,000
Reconciled balance in AA Bank checking account (14,000)
Reconciled balance in BB Bank checking account 374,000
 Balance in CC savings account 342,400
Customer’s postdated check 54,000
Employee travel advances 64,000
Cash in bond sinking fund 48,000
Bond sinking fund investments 323,600
Postage stamps 17,200
Compute the total amount as cash at December 31, 2024.
Solution:
Cash on hand (undeposited sales receipts) 40,800
Reconciled balance in BB Bank checking account 374,000
Balance in CC savings account 342,400
Total cash 757,200

10. The controller of the Loderico Co. is trying to determine the amount of cash and cash equivalents to be
reported on its December 31, 2024, balance sheet. The following information is provided:
Balances in the company’s accounts at the Monte Bank:
Checking account 540,000
Savings account 884,000
Undeposited customer checks 208,000
Currency and coins 23,200
Savings account at the Cavite Bank with a balance of P350,000. This account is being used to
accumulate cash for future plant expansion in 2026. P800,000 balance in a checking account at the
Cavite Bank. In exchange for a line of credit, Loderico Co. has agreed to maintain a minimum balance
of P100,000 in this account. Compute the total cash and cash equivalents.

Solution:
Balances in the company’s accounts at the Monte Bank:
Checking account 540,000
Savings account 884,000
Undeposited customer checks 208,000
Currency and coins 23,200
Checking account in Cavite Bank 800,000
Treasury bills with 30-day maturity 600,000
Total cash and cash equivalents. 3,055,200

11. Alemania Co’s accounting manager wants to compute for the adjusted cash in bank balance by using the
balance per bank statement, which amounted to P3,400,000. The bank statement showed a bank loan
proceeds of P2,000,000 and bank service charge of P8,000. In addition, an NSF check amounting to
P90,000 was returned together with the bank statement. Upon comparing the deposits made with the
deposits acknowledged in the bank statement, the accounting manager noted that a total of P280,000
deposits are yet to be acknowledged by the bank. In the same way, the accounting manager noted that a
total P640,000 issued checks are not yet encashed by the payees. However, P140,000 of these checks
were already certified by the bank. Compute the adjusted cash in bank balance. 3,180,000

Solution:
Book Bank
Unadjusted balance (squeeze) 1,350,000 3,400,000
Proceeds of bank loan 2,000,000
Bank service charge (8,000)
NSF (90,000)
DIT 280,000
OC (640 – 140) (500,000)
 Adjusted balance 3,180,000 3,180,000

12. Compute the unadjusted cash balance per book. 1,350,000

13. When preparing the current month’s bank reconciliation, the accountant of Caldo Co. noted that there
were no deposits in transit, outstanding checks, debit memos and credit memos. Instead, the recording of
the company and the bank is plagued by the following errors:
a. A check correctly written for P78,000 was recorded by the company as P87,000.
b. A deposit P100,000 was recorded by the bank as P10,000.
c. A check for P250,000 was not recorded by the company.
d. A deposit of Cipriano Co. (an unrelated entity) amounting to P320,000 was recorded by the bank
in Caldo Co.’s bank account.
e. A check of the company amounting to P140,000 was recorded by the bank as Cipriano’s.
f. Deposit of P150,000 was recorded by the company as P15,000.
Unadjusted balance per books is P2,706,000 and per bank statement is P2,970,000. Compute the
adjusted cash in bank balance.

Solution:
Book Bank
Unadjusted balance 2,706,000 Unadjusted balance 2,970,000
a) Overstated disbursements: 9,000 b) Understated bank credits 90,000
(87,000 – 78,000) (10,000 -100,000)
c) Unrecorded debit memo (250,000) d) Erroneous bank credits (320,000)
f) Understated receipts: 135,000 e) Unrecorded bank debits (140,000)
(15,000 – 150,000)
Adjusted balance 2,600,000 Adjusted balance 2,600,000
Unadjusted balance (2,706,000) Unadjusted balance (2,970,000)
Net credit (106,000) Net credit (370,000)

14. Carlito Co. reported the following information:

Balance per books 2,052,000
Balance per bank statement 4,000,000
NSF check 100,000
Deposits in transit 750,000
Bank service charge 15,000
Outstanding checks, including certified checks of P120,000 690,000
Proceeds of bank loan 2,000,000
Note receivable collected by the bank:
Face amount 600,000
Interest income 30,000
Collection of service charge 5,000
Utilities paid by the bank on behalf of the company 70,000
A check of Camilo Co. was recorded by the bank as Carlito’s 250,000
A deposit of Carlito Co. was recorded by the bank as Camilo’s 170,000
Correct amount of the check that Carlito recorded as P110,000 11,000
Correct amount of the deposit that Carlito recorded as P89,000 98,000
Compute the adjusted amount of cash in bank.

Solution:
Book Bank
Unadjusted balance 2,052,000 Unadjusted balance 4,000,000
NSF check (100,000) Deposits in transit 750,000
 Bank service charge (15,000) Outstanding checks (690 – 120) (570,000)
Proceeds of bank loan 2,000,000 Overstated disbursements 250,000
Collection of NR (600 + 30 -15) 625,000 Unrecorded bank credits 170,000
Utilities paid by the bank on (70,000)
behalf of the company
Overstated disbursements 99,000
(11,000 – 110,000)
Understated receipts 9,000
(89,000 – 98,000)
Adjusted balance 4,600,000 Adjusted balance 4,600,000

Use the following information for the next 2 questions:

15. The controller of Mateo Co. is checking the bank reconciliation made by his accounting staff. Portions
of the file were partially corrupted upon sending to the comptroller and as a result, some amounts cannot
be read by the computer software. Help the comptroller to determine these amounts.
Balance per books 3,300,000
Adjusted cash in bank balance 5,143,000
Balance per bank statement ?
Deposit in transit 440,000
NSF check 130,000
Outstanding checks 280,000
Bank service charge 20,000
Note receivable collected by the bank:
Face amount ?
Interest income 45,000
Collection of service charge 2,000
Proceeds of bank loan 1,000,000
Check of another company incorrectly charged by the bank against the company’s account 180,000
Deposits that were not recorded by the company 150,000
Compute the balance per bank statement.
16. Compute the face amount of the notes receivable.

Solution:
Book Bank
Balance per books 3,300,000 Balance per book (squeeze) 4,803,000
NSF check (130,000) Deposit in transit 440,000
Bank service charge (20,000) Outstanding checks (280,000)
Proceeds of bank loan 1,000,000 Erroneous bank debit 180,000
Unrecorded deposits 150,000
Collection of NR 843,000
Adjusted balance 5,143,000 Adjusted balance 5,143,000

Note receivable collected by the bank:

Face amount 800,000
Interest income 45,000
Collection of service charge 2,000
Collection of NR 843,000

Use the following information for the next 2 questions:

17. The following information was provided by Regidor Co. in preparing its current month’s bank
reconciliation.
Balance per bank statement 9/30/2023 2,000,000
 Outstanding checks (with certified check of P100,000) 400,000
Deposits placed in the bank’s night depositary on September 30 600,000
Bank service charge 10,000
Proceeds of bank loan not recorded by Regidor 100,000
Customer’s check charged by the bank due to lack of counter signature 20,000
Amount erroneously credited by the bank to Regidor’s account 50,000
A supplier check for P10,000 was incorrectly recorded by Regidor as 100,000
Notes collected by the bank for Regidor 150,000
A customer check for P150,000 was incorrectly recorded by Regidor as 15,000
NSF checks not recorded on books nor redeposited 25,000
Check of Rigid Co. charged by the bank to Regidor Co. 60,000
Deposit of Regidor Co. credited by the bank to Rogelio Co. 100,000
Check issued by Regidor Co. charged by the bank to Remigio Co. 40,000
Compute the adjusted cash in bank balance.
18. Compute the unadjusted balance per book.

Solution:
Book Bank
Unadjusted balance 1,950,000 Unadjusted balance 2,000,000
BSC (Debit memo) (10,000) OC (400 – 100) (300,000)
Proceeds of bank loan (Credit memo) 100,000 DIT 600,000
Defective checks (Debit memo) (20,000) Over receipt (50,000)
Overpayment 90,000 Over disbursement 60,000
Note collected (Credit memo) 150,000 Under receipt 100,000
Under collection (150 – 15) 135,000 Under disbursement (40,000)
NSF (Debit memo) * (25,000)
Adjusted balance 2,370,000 Adjusted balance 2,370,000

*To be added to the book disbursements and deducted from book balance. No effect in the bank balance
because it has been deducted in the bank statement both the bank receipt and the bank disbursement.

Use the following information for the next 7 questions:

19. Mamaradlo Co. provided the following bank reconciliation on August 31:
Balance per bank statement 1,500,000
Deposits outstanding 300,000
Checks outstanding (180,000)
Errors 70,000
Adjusted cash balance 1,690,000

Balance per ledger 1,575,000

Credit memos 250,000
NSF checks not recorded nor redeposited (90,000)
Bank service charge (5,000)
Errors (40,000)
Adjusted cash balance 1,690,000

Information pertaining to August:

a) Book errors comprised an over-recording of customer check of P100,000 and over-recording of
disbursement of P60,000.
b) Bank error was actually an erroneous debit in the account of the company.
The following are data pertaining to September:
Receipts per ledger 1,600,000
 Disbursement per ledger 700,000
Credit memos 150,000
NSF Checks redeposited immediately 50,000
NSF Checks not recorded nor redeposited 40,000
Outstanding checks 100,000
Deposit in transit 280,000
Bank service charge 10,000
Error in recording customer check amounting to P100,000 as 10,000
Deposit of Mamagsakay Co. credited to company’s account 110,000
Check issued by Mamaradlo Co. charged by Mamasapano Co. 60,000
Customer check amounting P15,000 recorded by Mamaradlo Co. as 150,000
Erroneous charge by the bank to Mamaradlo’s account amounting to 40,000
Adjusted cash in bank balance at the end of August.
20. Adjusted cash receipts of September.
21. Adjusted cash disbursements of September.
22. Adjusted cash in bank balance at the end of September.
23. Unadjusted balance per bank statement for September.
24. Unadjusted bank receipts of September.
25. Unadjusted bank disbursement of September.

Solution:
(August) (September)
BOOK: Previous Receipts Disbursements Current
UNADJUSTED BALANCE 1,575,000 1,600,000 700,000 2,475,000
Credit memo:
 LAST MONTH 250,000 (250,000)
 CURRENT MONTH 150,000 150,000
NSF:
 LAST MONTH (90,000) (90,000)
 CURRENT MONTH 40,000 (40,000)
Service charge:
 LAST MONTH (5,000) (5,000)
 CURRENT MONTH 10,000 (10,000)
UNDERRECEIPT:
 LAST MONTH
 CURRENT MONTH 9,000 9,000
OVERRECEIPT:
 LAST MONTH (100,000) (100,000)
 CURRENT MONTH (135,000) (135,000)
UNDERDISBURSEMENT:
 LAST MONTH
 CURRENT MONTH
OVERDISBURSEMENT:
 LAST MONTH 60,000 (60,000)
 CURRENT MONTH
Adjusted balance 1,690,000 1,395,000 555,000 2,530,000
19) 20) 21) 22)
 (August) (September)
BANK: Previous Receipts Disbursements Current
UNADJUSTED BALANCE 1,500,000 1,645,000 665,000 2,480,000
24) 25) 23)
DIT:
 LAST MONTH 300,000 (300,000)
 CURRENT MONTH 280,000 280,000
OC:
 LAST MONTH (180,000) (180,000)
 CURRENT MONTH 100,000 (100,000)
UNDERRECEIPT:
 LAST MONTH
 CURRENT MONTH
OVERRECEIPT:
 LAST MONTH
 CURRENT MONTH (110,000) (110,000)
UNDERDISBURSEMENT:
 LAST MONTH
 CURRENT MONTH 60,000 (60,000)
OVERDISBURSEMENT:
 LAST MONTH 70,000 (70,000)
 CURRENT MONTH (40,000) 40,000
NSF redeposited (50,000) (50,000)
Adjusted balance 1,690,000 1,395,000 555,000 2,530,000