INTERMEDIATE ACCOUNTING 1

Summer class
Quiz

Problem solving

The following information pertains to Park Company at December 31, 2006:

Bank statement balance 1,000,000

Checkbook balance 1,400,000
Deposit in transit 500,000
Outstanding checks 100,000
1. In Park’s December 31, 2006 balance sheet, cash should be reported at

In preparing its August 31, 2006 bank reconciliation, Apex Company has available the following information:

Balance per bank statement 1,805,000

Deposit in transit 325,000
Return of customer’s check for insufficient fund 60,000
Outstanding checks 275,000
Bank service charge for August 10,000
2. At August 31, 2006, Apex’s correct cash balance is

In preparing its bank reconciliation at December 31, 2006, Case Company has made available the following data:

Balance per bank statement 3,800,000

Deposit in transit 520,000
Amounts erroneously credited by bank to Case’s account 40,000
Bank service charge for December 5,000
Outstanding checks 675,000
3. The adjusted cash in bank balance on December 31, 2006 is

In your audit of Mindanao Company as of December 31, 2006, you gathered the following:

Balance per book 1,000,000

Bank charges 3,000
Outstanding checks 235,000
Deposit in transit 300,000
Customer note collected by bank 375,000
Interest on customer note 15,000
Customer check returned NSF 62,000
Depositor’s note charged to account 250,000
4. The correct cash balance amounts to

Core Company provided the following data for the purpose of reconciling the cash balance per book with the
balance per bank statement on December 31, 2006:

Balance per bank statement 2,000,000

Balance per book 850,000
Outstanding checks (including certified check of P100,000) 500,000
Deposit in transit 200,000
December NSF checks (of which P50,000 had been redeposited and
cleared by December 27) 150,000
Erroneous credit to Core’s account, representing proceeds of loan
granted to another company 300,000
Proceeds of note collected by bank for Core, net of service charge of
P20,000 750,000
5. The cash in bank balance to be shown on Core’s December 31, 2006 balance sheet is
Aries Company keeps all its cash in a checking account. An examination of the company’s accounting records
and bank statement for the month ended June 30, 2006 revealed the following information:

 The cash balance per book on June 30 is P8,500,000.

 A deposit of P1,000,000 that was placed in the bank’s night depository on June 30 does not appear on
the bank statement.
 The bank statement shows on June 30, the bank collected note for Aries and credited the proceeds of
P950,000 to the company’s account.
 Checks outstanding on June 30 amount to P300,000.
 Aries discovered that a check written in June for P200,000 in payment of an account payable, had been
recorded in the company’s records as P20,000.
 Included with the June bank statement was NSF check for P250,000 that Aries had received from a
customer on June 26.
 The bank statement shows a P20,000 service charge for June.
6. The cash in bank to be shown on the balance sheet on June 30, 2006 is:

On March 3, 2006, Able Company received its bank statement. However, the closing balance of the account
was unreadable. Attempts to contact the bank after 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
Deposit of February 28 placed in night depository 85,000
Check issued by Axle Company charged to Able’s account 20,000
7. What was the cash balance per bank statement?

Carefree Company’s newly hired assistant prepared the following bank reconciliation on March 31, 2006:

Book balance 1,405,000

Add: March 31 deposit 750,000
Collected of note 2,500,000
Interest on note 150,000 3,400,000
Total 4,805,000
Less: Careless Company’s deposit to account 1,100,000
Bank service charge 45,000 1,145,000
Adjusted book balance 3,660,000
Bank balance 5,630,000
Add: Error on check No. 175 45,000
Total 5,675,000
Less: Preauthorized payments for water bill 205,000
NSF check 220,000
Outstanding check 1,650,000 2,075,000
Adjusted bank balance 3,600,000
Check No. 175 was made for the proper amount of P249,000 in payment of account. However it was entered
in the cash payments journal as P294,000. Carefree authorized the bank to automatically pay its water bills as
submitted directly to the bank.

8. the correct cash in bank balance is

The bookkeeper of Divine Company recently prepared the following bank reconciliation on December 31, 2006:

Balance per bank statement 2,800,000

Add: Deposit in transit 195,000
Checkbook printing charge 5,000
Error made by Divine in recording check No.45
(issued in December) 35,000
NSF check 110,000 345,000
3,145,000
Less: Outstanding check 100,000
Note collected by bank
(includes P15,000 interest) 215,000 315,000
Balance per book 2,830,000
Divine Company has P200,000 cash on hand on December 31, 2006.

9. The amount to be reported by Divine Company as cash on the balance sheet as of December 31, 2006 should
be

While checking the cash account of ABC Company on December 31, 2006, you find the following information:

Balance per book 6,776,000

Balance per bank statement (outstanding checks of P987,000) 6,532,000
Deposit in bank closed by BSP 1,600,000
Deposit in transit 1,234,000
Currency and coins counted 950,000
Petty cash fund (of which P10,000 is in the form of paid vouchers 50,000
Bank charges not yet taken up in the book 6,000
Bond sinking fund cash 1,000,000
Receivables from employees 70,000
Error in recording a check in the books. The correct amount as paid by
the bank is P89,000 instead of P98,000 as recorded in the books, or a
different of 9,000
10. The correct cash in bank balance for ABC on December 31, 2006 is

1. 1 400 000
2. 1 855 000
3. 3605000
4. 1075000
5. 1500000
6. 9000000
7. 1532000
8. 3630000
9. 3095000
10. 6779000