BA 120.

2
PROBLEM SET
DUE: TUESDAY, 16 AUGUST 2016

Problem 1
In auditing the Train Company, you obtained directly from the bank the following: Trains
bank statement, cancelled checks, and other memoranda which relate to the companys
account for December 2010.
In reconciling the bank balance on December 31, 2010 with that shown on the companys
books, you observe the following facts:

Required:
(1) Prepare a reconciliation of the Train Companys bank account in good form.
(2) Prepare all the journal entries to adjust the Train Companys books to reflect the
correct bank balance on December 31, 2010.

Problem 2
The Daisy Company received a bank statement for February, as follows:
From: Central Bank, Denver, CO 80222
To: Daisy Company, 1313 Williams St., Denver, CO 80218

The receipt of $460 on February 14 was for a $445 note collected by the bank, plus $20
current interest, less a $5 service charge.
The companys accounting records contained the following information:
Cash balance on February 28 from the books: $2,610.42

Required:
Prepare a bank reconciliation on February 28 for the Daisy Company.

Problem 3
Jason Company provided the following information with respect to its cash and cash
equivalents on December 31, 2009.
Checking account at First Bank
Checking account at Second Bank
Treasury bonds
Payroll account
Value added tax account
Foreign bank account - restricted (in equivalent pesos)
Postage stamps
Employee's postdated check
IOU from president's brother
Credit memo from a vendor for a purchase return
Traveler's check
Not-sufficient-fund check
Petty cash fund (P20,000 in currency and expense receipts for
P30,000)
Money order

( 200,000)
3,500,000
1,000,000
500,000
400,000
2,000,000
50,000
300,000
750,000
80,000
300,000
150,000
50,000
180,000

What amount would be reported as unrestricted cash on December 31, 2009?

(Properly label your solution)

Problem 4
Kenny Company had the following bank reconciliation on June 30, 2013:
Balance per bank statement, June
30
Deposit in transit
Outstanding check
Balance per book, June 30

3,000,000
400,000
(900,000)
2,500,000

The bank statement for the month of July showed the following:
Deposits (including P200,000 note collected for Kenny)
Disbursements (including P140,000 NSF check and
P10,000 service charge)

9,000,000
7,000,000

All reconciling items on June 30 cleared through the bank in July. The outstanding checks
totalled P 600,000, and the deposit in transit amounted to P 1,000,000 on July 31. What is the
amount of cash receipts per book in July?