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Exercise 2 1. Balance per book Service charge NSF check Proceeds from note collection Adjusted balance Balance per bank DIT OC Adjusted balance Adjusting entries: Service charge A/R Cash in bank
P 500,000 (5,000) (50,000) 215,000 P 660,000 P 445,000 300,000 (85,000) P 660,000 5,000 50,000 55,000
Cash in bank 215,000 Service charge 5,000 Interest income N/R
20,000 200,000
2. Balance per book Add: CM for note collected Total Less: DM for service charge Adjusted book balance
P 260,000 120,000 380,000 8,000 P 372,000
Balance per bank Add: Deposit in transit Total Less: Outstanding checks: No. 102 105 107 Adjusted bank balance
P 432,000 320,000 P 752,000 60,000 120,000 200,000
Adjusting entries: 1. Cash in bank Note receivable 2. Bank service charge Cash in bank
380,000 P 372,000
120,000 120,000 8,000 8,000
3. Balance per book Add: CM for note collected Total Less: DM for service charge NSF check Book error (52,000 – 25,000) Adjusted book balance Balance per bank
110,000 45,000 155,000 5,000 10,000 27,000
42,000 113,000 135,000
Add: Deposit in transit Erroneous bank debit Total Less: Outstanding checks: No. 770 775 777 Adjusted bank balance
60,000 8,000
68,000 203,000
20,000 30,000 40,000
Adjusting entries: 1. Cash in bank Bank service charge Note receivable
90,000 113,000
45,000 5,000 50,000
2. Bank service charge Accounts receivable Accounts payable Cash in bank
5,000 10,000 27,000 42,000
4. Adjusting entries: 1. Cash in bank Accounts payable Accounts receivable
450,000 270,000 180,000
2. Accounts receivable Bank service charge Accounts payable Cash in bank
50,000 5,000 125,000 180,000
Balance per book Overstatement of creditor’s check Understatement of customer’s check Total Less: NSF check DM for safety box Unrecorded check Adjusted book balance 5. Adjusting entries: 1. Cash in bank Note receivable 2. Bank service charge Accounts receivable Cash in bank Balance per book – April 30 CM for note collected Bank service charge NSF check Adjusted cash in bank
3,130,000 270,000 180,000 3,580,000 50,000 5,000 125,000
60,000 60,000 5,000 25,000 30,000 1,100,000 60,000 ( 5,000) ( 25,000) 1,130,000
180,000 3,400,000
Balance per bank, April 30 Undeposited collections Less Outstanding checks: No. 1331 1332 1334 1335 Adjusted cash in bank
1,000,000 270,000 40,000 30,000 60,000 10,000
140,000 1,130,000
6. Book balance Add: Collection of note Interest on note Book error on check no. 175 Total Less: Bank service charge Payment for light and water NSF check Adjusted book balance Bank balance Add: Deposit in transit Total Less: Bank error Outstanding checks Adjusted bank balance
1,405,000 2,500,000 150,000 45,000 5,000 245,000 220,000
2,695,000 4,100,000
470,000 3,630,000 5,630,000 750,000 6,380,000
1,100,000 1,650,000
2,750,000 3,630,000
Adjusting entries: 1. Cash in bank Note receivable Interest income Accounts payable
2,695,000
2. Bank service charge Light and water Accounts receivable Cash in bank
5,000 245,000 220,000
2,500,000 150,000 45,000
470,000
7. Balance per book Add: Overstatement of check number 765 Check number 555 stopped for payment Total Less: Service charge NSF check Adjusted book balance Balance per bank Add: Undeposited collections Total Less: Outstanding checks: Number 761
1,300,000 20,000 10,000 5,000 85,000
30,000 1,330,000 90,000 1,240,000 1,200,000 275,000 1,475,000
55,000
762 763
40,000 25,000 65,000 50,000
764 765 Adjusted bank balance Adjusting entries: 1. Cash in bank Accounts payable Miscellaneous income
235,000 1,240,000
30,000 20,000 10,000
2. Bank service charge Accounts receivable Cash in bank
5,000 85,000
3. Receivable from cashier Accounts receivable Sales discounts
40,000
90,000
30,000 10,000
8. Unadjusted balance Note collected by the bank Outstanding checks Undeposited collections Corrected balances Shortage Adjusted balances
BOOK 520,500 7,500 ______ 528,000 (33,600) 494,400
Concealment of Shortage Omission of outstanding check #1428 Underfooting of outstanding checks in reconciliation Adding (instead of deducting) the unrecorded note collected by the bank
BANK 405,000 49,020 138,420 494,400 ______ 494,400
15,600 3,000 15,000
9. DIT, Aug Cash receipts – Sept Total cash to be deposited to the bank in Sept Cash acknowledged by the bank as deposits from the company DIT, Sept.
19,000 61,000 80,000 (60,400) 19,600
OC, Aug Cash disbursements – Sept Total cash to be paid by the bank in Sept Checks paid/cleared by the bank in Sept OC, Sept.
3,200 48,000 51,200 (47,200) 4,000
10. DIT, Feb Cash receipts – March Total cash to be deposited to the bank in March Cash acknowledged by the bank as deposits from the company DIT, March
17,000 490,000 507,000 (476,000) 31,000
OC, Feb Cash disbursements – March Total cash to be paid by the bank in March Checks paid/cleared by the bank in March OC, March
39,000 610,000 649,000 (602,000) 47,000
11. DIT, March Cash receipts – April Total cash to be deposited to the bank in April Cash acknowledged by the bank as deposits from the company DIT, April
2,100 13,889 15,989 (10,784) 5,205
OC, March Cash disbursements – April Total cash to be paid by the bank in April Checks paid/cleared by the bank in April OC, April
3,800 10,080 13,880 (11,600) 2,280
Unadjusted balance bank DIT Outstanding checks Adjusted balance 12. Bank balance Bank error on deposit Bank error on payment Deposit in transit: July August Outstanding checks: July August Adjusted
Book balance Book error on collection Book error on payment NSF check: July August Note collected by bank: July August Adjusted
27,995 5,205 (2,280) 30,920 July 31 800,000
Receipts 5,000,000 ( 200,000)
Disbursements 3,940,000 ( 400,000)
600,000
( 600,000) 480,000
( 100,000) 1,300,000
4,680,000
July 31 1,200,000
Receipts 4,400,000 180,000
480,000 ( 100,000) 650,000 4,090,000 Disbursements 3,600,000 540,000
(100,000)
200,000 1,300,000
( 100,000) 50,000 (200,000) 300,000 4,680,000
August 31 1,860,000 ( 200,000) 400,000
4,090,000
( 650,000) 1,890,000 August 31 2,000,000 180,000 (540,000)
( 50,000)
300,000 1,890,000
13. Book balance NSF check: September 30 October 31 Collection of accounts receivable September 30 October 31 Overstatement of check September 30 October 31 Adjusted balance Bank balance Deposit in transit September 30 October 31 Outstanding checks September 30 October 31 Adjusted balance
Sept. 30 1,900,000 (
Receipts 1,400,000
60,000)
Disbursements Oct. 31 2,400,000 900,000 (
30,000
(
90,000
60,000) 40,000
30,000) 50,000
( 40,000)
50,000
(
1,960,000
90,000) _______ 1,330,000
( 120,000) 2,260,000
120,000 1,030,000
2,100,000
1,200,000
2,500,000
800,000
130,000
( 130,000) 260,000
( 270,000) 1,960,000
1,330,000
260,000 ( 270,000) 30,000 2,260,000
( 30,000) 1,030,000
14. Bank balance DIT November December OC November December Error – interest Uncollectible customers check
Book balance Service charge November December Interest credited November December Error (2,300 vs 3200) Uncollectible customers check NSF check ****
Nov. 30 294,771
Receipts 1,065,620
21,270
(21,270) 32,925
(40,525)
Disbursements 1,211,405
Dec. 31 148,986
32,925
275,516
(5,947) 1,071,328
(40,525) 35,191.50 (625) 5947 1,199,499.50
270,311
1,072,850
1,195,536.50
147,624.50
(295) 158
(158)
(295)
5,500
(5,500) 4,925 (900)
275,516
(5,947) 5,000 1,071,328
**** It can also be presented in the balance per bank… Service charge Cash in bank
158
Cash in bank Interest income
4,925
158
4,925
5,000 1,199,499.50
(35,191.50) 625 147,344.50
4925 900 (5,947) 147,344.50
Cash in bank Accounts payable
900
Allo.for DA Cash in bank
5,947
900
5,947
Exercise 3 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
A C B C B B B C A B
11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
D B A C B C D A B B
21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
D C C A A B D B C D
P 500,000 (5,000) (50,000) 215,000 P 660,000 P 445,000 300,000 (85,000) P 660,000 5,000 50,000 55,000
Cash in bank 215,000 Service charge 5,000 Interest income N/R
20,000 200,000
2. Balance per book Add: CM for note collected Total Less: DM for service charge Adjusted book balance
P 260,000 120,000 380,000 8,000 P 372,000
Balance per bank Add: Deposit in transit Total Less: Outstanding checks: No. 102 105 107 Adjusted bank balance
P 432,000 320,000 P 752,000 60,000 120,000 200,000
Adjusting entries: 1. Cash in bank Note receivable 2. Bank service charge Cash in bank
380,000 P 372,000
120,000 120,000 8,000 8,000
3. Balance per book Add: CM for note collected Total Less: DM for service charge NSF check Book error (52,000 – 25,000) Adjusted book balance Balance per bank
110,000 45,000 155,000 5,000 10,000 27,000
42,000 113,000 135,000
Add: Deposit in transit Erroneous bank debit Total Less: Outstanding checks: No. 770 775 777 Adjusted bank balance
60,000 8,000
68,000 203,000
20,000 30,000 40,000
Adjusting entries: 1. Cash in bank Bank service charge Note receivable
90,000 113,000
45,000 5,000 50,000
2. Bank service charge Accounts receivable Accounts payable Cash in bank
5,000 10,000 27,000 42,000
4. Adjusting entries: 1. Cash in bank Accounts payable Accounts receivable
450,000 270,000 180,000
2. Accounts receivable Bank service charge Accounts payable Cash in bank
50,000 5,000 125,000 180,000
Balance per book Overstatement of creditor’s check Understatement of customer’s check Total Less: NSF check DM for safety box Unrecorded check Adjusted book balance 5. Adjusting entries: 1. Cash in bank Note receivable 2. Bank service charge Accounts receivable Cash in bank Balance per book – April 30 CM for note collected Bank service charge NSF check Adjusted cash in bank
3,130,000 270,000 180,000 3,580,000 50,000 5,000 125,000
60,000 60,000 5,000 25,000 30,000 1,100,000 60,000 ( 5,000) ( 25,000) 1,130,000
180,000 3,400,000
Balance per bank, April 30 Undeposited collections Less Outstanding checks: No. 1331 1332 1334 1335 Adjusted cash in bank
1,000,000 270,000 40,000 30,000 60,000 10,000
140,000 1,130,000
6. Book balance Add: Collection of note Interest on note Book error on check no. 175 Total Less: Bank service charge Payment for light and water NSF check Adjusted book balance Bank balance Add: Deposit in transit Total Less: Bank error Outstanding checks Adjusted bank balance
1,405,000 2,500,000 150,000 45,000 5,000 245,000 220,000
2,695,000 4,100,000
470,000 3,630,000 5,630,000 750,000 6,380,000
1,100,000 1,650,000
2,750,000 3,630,000
Adjusting entries: 1. Cash in bank Note receivable Interest income Accounts payable
2,695,000
2. Bank service charge Light and water Accounts receivable Cash in bank
5,000 245,000 220,000
2,500,000 150,000 45,000
470,000
7. Balance per book Add: Overstatement of check number 765 Check number 555 stopped for payment Total Less: Service charge NSF check Adjusted book balance Balance per bank Add: Undeposited collections Total Less: Outstanding checks: Number 761
1,300,000 20,000 10,000 5,000 85,000
30,000 1,330,000 90,000 1,240,000 1,200,000 275,000 1,475,000
55,000
762 763
40,000 25,000 65,000 50,000
764 765 Adjusted bank balance Adjusting entries: 1. Cash in bank Accounts payable Miscellaneous income
235,000 1,240,000
30,000 20,000 10,000
2. Bank service charge Accounts receivable Cash in bank
5,000 85,000
3. Receivable from cashier Accounts receivable Sales discounts
40,000
90,000
30,000 10,000
8. Unadjusted balance Note collected by the bank Outstanding checks Undeposited collections Corrected balances Shortage Adjusted balances
BOOK 520,500 7,500 ______ 528,000 (33,600) 494,400
Concealment of Shortage Omission of outstanding check #1428 Underfooting of outstanding checks in reconciliation Adding (instead of deducting) the unrecorded note collected by the bank
BANK 405,000 49,020 138,420 494,400 ______ 494,400
15,600 3,000 15,000
9. DIT, Aug Cash receipts – Sept Total cash to be deposited to the bank in Sept Cash acknowledged by the bank as deposits from the company DIT, Sept.
19,000 61,000 80,000 (60,400) 19,600
OC, Aug Cash disbursements – Sept Total cash to be paid by the bank in Sept Checks paid/cleared by the bank in Sept OC, Sept.
3,200 48,000 51,200 (47,200) 4,000
10. DIT, Feb Cash receipts – March Total cash to be deposited to the bank in March Cash acknowledged by the bank as deposits from the company DIT, March
17,000 490,000 507,000 (476,000) 31,000
OC, Feb Cash disbursements – March Total cash to be paid by the bank in March Checks paid/cleared by the bank in March OC, March
39,000 610,000 649,000 (602,000) 47,000
11. DIT, March Cash receipts – April Total cash to be deposited to the bank in April Cash acknowledged by the bank as deposits from the company DIT, April
2,100 13,889 15,989 (10,784) 5,205
OC, March Cash disbursements – April Total cash to be paid by the bank in April Checks paid/cleared by the bank in April OC, April
3,800 10,080 13,880 (11,600) 2,280
Unadjusted balance bank DIT Outstanding checks Adjusted balance 12. Bank balance Bank error on deposit Bank error on payment Deposit in transit: July August Outstanding checks: July August Adjusted
Book balance Book error on collection Book error on payment NSF check: July August Note collected by bank: July August Adjusted
27,995 5,205 (2,280) 30,920 July 31 800,000
Receipts 5,000,000 ( 200,000)
Disbursements 3,940,000 ( 400,000)
600,000
( 600,000) 480,000
( 100,000) 1,300,000
4,680,000
July 31 1,200,000
Receipts 4,400,000 180,000
480,000 ( 100,000) 650,000 4,090,000 Disbursements 3,600,000 540,000
(100,000)
200,000 1,300,000
( 100,000) 50,000 (200,000) 300,000 4,680,000
August 31 1,860,000 ( 200,000) 400,000
4,090,000
( 650,000) 1,890,000 August 31 2,000,000 180,000 (540,000)
( 50,000)
300,000 1,890,000
13. Book balance NSF check: September 30 October 31 Collection of accounts receivable September 30 October 31 Overstatement of check September 30 October 31 Adjusted balance Bank balance Deposit in transit September 30 October 31 Outstanding checks September 30 October 31 Adjusted balance
Sept. 30 1,900,000 (
Receipts 1,400,000
60,000)
Disbursements Oct. 31 2,400,000 900,000 (
30,000
(
90,000
60,000) 40,000
30,000) 50,000
( 40,000)
50,000
(
1,960,000
90,000) _______ 1,330,000
( 120,000) 2,260,000
120,000 1,030,000
2,100,000
1,200,000
2,500,000
800,000
130,000
( 130,000) 260,000
( 270,000) 1,960,000
1,330,000
260,000 ( 270,000) 30,000 2,260,000
( 30,000) 1,030,000
14. Bank balance DIT November December OC November December Error – interest Uncollectible customers check
Book balance Service charge November December Interest credited November December Error (2,300 vs 3200) Uncollectible customers check NSF check ****
Nov. 30 294,771
Receipts 1,065,620
21,270
(21,270) 32,925
(40,525)
Disbursements 1,211,405
Dec. 31 148,986
32,925
275,516
(5,947) 1,071,328
(40,525) 35,191.50 (625) 5947 1,199,499.50
270,311
1,072,850
1,195,536.50
147,624.50
(295) 158
(158)
(295)
5,500
(5,500) 4,925 (900)
275,516
(5,947) 5,000 1,071,328
**** It can also be presented in the balance per bank… Service charge Cash in bank
158
Cash in bank Interest income
4,925
158
4,925
5,000 1,199,499.50
(35,191.50) 625 147,344.50
4925 900 (5,947) 147,344.50
Cash in bank Accounts payable
900
Allo.for DA Cash in bank
5,947
900
5,947
Exercise 3 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
A C B C B B B C A B
11. 12. 13. 14. 15. 16. 17. 18. 19. 20.
D B A C B C D A B B
21. 22. 23. 24. 25. 26. 27. 28. 29. 30.
D C C A A B D B C D
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