FINANCIAL ACCOUNTING REVIEW

Problem 1

The following bank reconciliation is presented for Pau Company for the month of November 2016:

Balance per bank statement, 11/30/16 Php 180,400

Add: Deposit in transit Php 41,500
Erroneous bank charge 15,000
--------------------- 56,500
----------------------
236,900
Less: Outstanding checks 78,200
----------------------
Balance per books, 11/30/16 Php 158,700
=============

Data for the month of December 2016 follow:

Per bank : December deposits/credits Php 261,000
December charges/debits 224,200
Balance December 31, 2016 217,200

All items that were outstanding as of November 30 cleared through the bank in December, including the bank
charge. In addition, Php25,000 in checks were outstanding as of December 31, 2016?

1. What is the amount of cash disbursements per books in December 2016?

a. Php146,000 c. Php249,200
b. Php171,000 d. Php249,200

25,000 + 224,200 -78,200 = 171,000

2. What is the amount of cash receipts per books in December 2016?

a. Php204,500 c. Php246,000
b. Php219,500 d. Php317,500

261,000 – 41,500 – 15,000 = 204,500

3. What is the cash balance per books at December 31, 2016?

a. Php257,200 c. Php207,200
b. Php242,200 d. Php192,200.

217,200-25,000 = 192,200

Problem 2

The following pertains to Pau Company on December 31, 2016:

Postage stamps Php 5,000
Credit memo from a vendor for a purchase
Return 100,000
Current account Kapamilya bank ( 500,000)
Current account at Kapuso bank 10,000,000
Employees postdated check 20,000
Foreign bank account-restricted (in equivalent peso) 5,000,000
IOU from Finance Manager’s brother in law 50,000
Trading securities 75,000
Payroll account 2,500,000
Petty cash fund (Php20,000 in currency and
expenses receipts for Php30,000) 50,000
Postal money order 150,000
Traveler’s check 250,000
Treasury bills, due 1/31/17 (purchased 1/31/16) 1,500,000
Treasury bills, due 3/31/17 (purchased 12/31/16) 1,000,000
Treasury warrants 1,500,000

Additional information:
a. Check of Php1,000,000 in payment of accounts payable was recorded on December 31, 2016 but
mailed to suppliers on January 5, 2017.
b. Check of Php500,000 dated January 15, 2017 in payment of accounts payable was recorded and
mailed on December 31, 2016.
c. Check of Php250,000 dated January 15, 2016 in payment of accounts payable was recorded and
mailed on January 15, 2016. As of the reporting period, the same has not been encashed by the
payee and still outstanding.
4. How much cash and cash equivalents should Pau Company report on the December 31, 2016 statement
of financial position?
a. Php15,650,000 c. Php17,170,000
b. Php17,000,000 d. Php18,650,000

10,000,000+2,500,000+20,000+150,000+250,000+1,000,000+1,500,000+1,000,000
+500,000 + 250,000 = 17,170,000

Problem 3

While checking the cash account of Camil Company on December 31, 2016, you find the following information:
Balance per books Php 677,600
Balance per bank statement 653,230
Deposit in bank closed by Banko
Sentral ng Pilipinas 160,000
Outstanding checks 98,760
Deposits in transit 123,450
Currency and coins counted 95,000
Petty cash fund (of which Php4,500
is in the form of paid vouchers) 10,000
Bank charges not yet taken up in the books 580
Receivable from employees 7,000
Bond sinking fund cash 100,000
Error in recording check in the books.
The correct amount as paid by the bank
is Php8,900 instead of Php9,800 as
recorded in the books, of difference of 900

5. The correct cash in bank balance for Camil Company on December 31, 2016 is
a. Php554,150 c. Php702,290
b. Php677,920 d. Php837,920.

653,230 -98,760 + 123,450 = 677,920

6. What is the correct cash on hand balance for Camil Company on December 31,2 016?
a. Php95,000 c. Php128,950
b. Php100,500 d. Php195,000

95,000 + (10,000 – 4,500) = 100,500

Problem 4

Total cash and cash equivalent of Php63,250,000 reported by Mari Company on December 31, 2017 include the
following information:
a. Two certificates of deposits, each totaling Php5,000,000, having a maturity of 120 days.
b. A check is dated January 12, 2018 in the amount of Php1,250,000.
c. A commercial paper of Php21,000,000 which due in 90 days.
d. Currency and coins on hand amounted to Php770,000.

Mari Company has agreed to maintain a cash balance of Php5,000,000 in one of its banks at all times to ensure
future credit availability (this amount is legally restricted as to withdrawal and was included in the above balance)

7. How much is the correct amount of cash and cash equivalents that Mari Company should report in its
December 31, 2017 statement of financial position?
a. Php57,000,000 c. Php47,000,000
b. Php31,000,000 d. Php62,000,000

63,250,000-10,000,000-1,250,000- 5,000,000 = 52,000,000

Problem 5

The cash account of Pau Company on December 31, 2016 has a balance of Php4,620,000 and
it consists of the following:
Balance in savings account with a bank closed by the BSP Php 720,000
Bills and coins on hand 1,055,600
Checking account balance in Kapuso bank 440,000
Credit memo from supplier’s for purchase returns 130,000
Customer’s check dated January 15, 2016 160,000
Customer’s check dated January 16, 2017 600,000
Customer’s check returned on 12/31/16 for lack of
sufficient fund 1,000,000
 IOU of an employee 8,000
Money order 16,000
Petty cash including paid cash vouchers of Php16,500 40,000
Postage stamps 2,400
Traveler’s checks 448,000
----------------------
Total Php 4,620,000
============

8. The correct cash and cash equivalents balance on December 31, 2016 is _________.
a. Php1,959,600 c. Php1,966,400
b. Php1,966,600 d. Php1,983,100.

1,055,600 + 440,000+16,000+23,500+448,000 = 1,983,100

Problem 6

Mari Company is preparing its March 31 bank reconciliation.

The following data are available:

Per bank Per books

a. March data:
Balance, February 28 Php 741,400 Php 719,400
March deposits reflected 476,000 490,000
March checks reflected (617,000)* ( 610,000)
Note collected including
Php2,000 interest) 202,000
Service charge ( 1,200)
---------------------- ----------------------
Balance March 31 Php 801,200 Php 599,400
============ ============

*Erroneously includes a check drawn by Maria Company for Php15,000.

b. From the February 28 bank reconciliation:
Deposits in transit, Php17,000
Outstanding checks, Php39,000

9. The deposits in transit at March 31 is

a. Php45,000 c. Php14,000
b. Php31,000 d. Php3,000

17,000 + 490,000 – 476,000 = 31,000

10. What is the amount of outstanding checks at March 31?

a. Php47,000 c. Php8,000
b. Php15,000 d. Php7,000

39,000 + 610,000 – (617,000 – 15,000) = 47,000

Problem 7

The cashier misplaced all the bank statements for the past year. You reviewed the accounting records and
discovered that the following journal entry was made to reconcile the June 30, 2016 bank records and accounting
records:

Accounts receivable 152,024

Miscellaneous expense 1,250
Notes receivable 20,000
Interest revenue 1,000
Cash 132,274

Pre adjustment cash balance in the accounting records was Php768,370, outstanding checks were Php20,750
and no other adjustments were required.

11. What is the bank statement balance at June 30, 2016?

a. Php615,346 c. Php656,846
b. Php636,096 d. Php768,370

768,370 – 132,274 + 20,750 = 656,846

Problem 8

Camil Company had the following account balances at December 31, 2016:
Cash in banks Php 4,500,000
Cash on hand 250,000
Cash legally restricted for additions to
plant (expected to be distributed in 2017) 3,200,000

Cash in banks include Php1.200,000,000 of compensating balances are not legally restricted as to withdrawal by
Camil Company.

12. In the current assets section of Camil Company’s December 31, 2016 statement of financial position, total
cash should be reported at

a. Php3,550,000 c. Php4,750,000
b. Php4,500,000 d. Php7,950,000

4,500,000 + 250,000 = 4,750,000

Problem 9

Pau Company’s checkbook balance at December 31, 2016 was Php100,000. In addition, Pau Company
held the following items in its safe on that date.

Check payable to Pau Company, dated December 31, 2016 in payment of a sale made in December 2016 not
included in December 31, Checkbook balance, Php40,000.

Check payable to Pau Company, deposited December 15 but returned by bank on December 30 marked “NSF”.
The deposit and return were both reflected in the checkbook, Php10,000.

Check drawn on Pau Company’s account, payable to a vendor, dated December, but not yet mailed to payee as
of December 31, 2016. The check is not yet recorded, Php6,000.

13. The amount to be shown as cash on Pau’s statement of financial position at December 31, 2016 is
_________.

a. Php96,000 c. Php136,000
b. Php130,000 d. Php140,000.

100,000 + 40,000 = 140,000

Problem 10

The following pertains to Mari Company Trading on April 30, 2016:

Correct cash balance in general checking
account with Kapuso bank Php 640,000
Overdraft in a special checking account with
Kapamilya bank (Mari Company does not
have another account with Kapamilya bank 40,000
Cash accumulated in a special fund that will
be used for plant expansion in five years 300,000
Cash travel advances in the hands of sales
personnel 24,000
Cash surrender value of life insurance policy 64,000
Currency and coins in a petty fund ( the company
has not replenished the fund to the
imprest amount of Php2,000) 1,160

14. How much cash should Mari report on the April30, 2016 statement of financial position?

a. Php665,160 c. Php641,160
b. Php644,000 d. Php604,000

640,000 + 1,160 = 641,160

Problem 11

Assume the following data of Pau Company of its cash and short-term, highly liquid investments for December 31,
2017:
 Cash on hand Php 800,000
Checking account No. 421, Kapuso bank 2,000,000
Checking account No. 724, Kapuso bank ( 300,000)

Date Maturity
Securities Acquired Date Amount
120-day certificate of deposit 12/10/17 1/31/18 Php 6,000,000
BSP-Treasury bills (No. 1) 11/30/17 4/30/18 50,000,000
BSP-Treasury bills (No. 2) 10/31/17 1/20/18 10,000,000
180 days commercial paper 12/1/17 6/20/18 14,000,000
Money market funds 11/21/17 2/10/18 20,000,000

15. Tha correct cash and cash equivalents balance on December 31, 2017 is
a. Php38,500,000 c. Php52,500,000
b. Php38,800,000 d. Php52,800,000

800,000+2,000,000-300,000+6,000,000+10,000,000+20,000,000 = 38,500,000

Problem 12

The statement of financial position of a company presents the following financial assets at December 31, 2017:
a. Bank cheque account, Php58,400.
b. Bank savings account (collectible immediately), Php23,440.
c. Cash, Php10,000.
d. Common stocks of Equity C, one of the most traded assets in the Philippines Stock Exchange,
purchase by the airline to speculate, Php2,715.
e. Oil price derivative entered into by the entity to hedge the commodity price risk of the anticipated
future purchase of oil for use in the entity’s operating business, Php6,720.
f. A gold price derivative entered into by the entity to speculate, Php9,880.
g. Treasury bonds issued by the government of the Philippines, Php8,500. The entity acquired the
bonds from the government one week before the entity’s reporting date.
h. The bonds mature 2 months after the date of acquisition (ie two months from date of issue)

16. In the absence of evidence to the contrary, the entity’s total cash and cash equivalent at December 31,
2017 is __________.
a. Php98,560 c. Php100,340
b. Php109,775 d. Php107,060.

58,400 + 23,440 + 10,000 + 8,500 = 100,340

Problem 13

The December 31, 2016 trial balance of Mari Company includes the following accounts:
Petty cash fund Php 700,000
Current account-Kapuso bank 40,000,000
Current account-Kapamilya bank (overdraft) ( 2,500,000)
120-day money market placement-K bank 10,000,000
Time deposit-KB bank 20,000,000
Additional information:
a. The petty cash fund includes unreplenished December 2016 petty cash expense vouchers for
Php150,000 and an employee check for Php50,000 dated January 31, 2017.
b. A check for Php1,000,000 was drawn against Kapuso bank current account dated and recorded
December 27, 2106 but delivered to payee on January 10, 2017.
c. The KB bank time deposit is set aside for land acquisition in early January 2017.

17. What should be reported as “cash and cash equivalents” on December 31, 2016?
a. Php51,300,000 c. Php41,500,000
b. Php51,500,000 d. Php48,800,000

(700,000-150,000-50,000=500,000) + (40,000,000+1,000,000=41,000,000) =41,500,000

Problem 14

Camil Company’s ledger showed a balance in its cash account at December 31, 2016 of Php1,364,500, which
was determined to consist of the following:
Petty cash fund Php 7,200
Checking account in Kapamilya bank ( check
of Php12,000 is still outstanding) 673,500
Notes receivable in the possession of a
collecting agency 50,000
 Undeposited receipts, including a postdated
check for Php10,500 and traveller’s check
for Php10,000 356,000
Bond sinking fund cash 255,000
IOUs signed by employees 9,900
Paid vouchers, not yet recorded 12,900
---------------------
Total Php 1,364,500
============

18. At what amount should “cash on hand and in bank” be reported on Camil Company’s statement of
financial position?
a. Php1,003,700 c. Php1,258,700
b. Php1,014,200 d. Php1,324,500

7,200 + (673,500 – 12,000) + (356,000-10,500) = 1,014,200

Problem 15
The petty cash fund is established in the amount of Php10,000 and contains Php8,000
In cash and Php1,900 in receipts for disbursements when it is replenished.
19. The journal entry to record replenishment should include credit/s to the following account/s
a. Petty cash, Php1,500 c. Petty cash, Php2,000
b. Cash in bank,Php1,900; Cash d. Cash in bank, Php2,000.
Over and short, Php100

Expenses 1,900
Cash short or over 100
Cash in bank 2,000

Problem 16

The petty cash fund of Pau Company at the end of the fiscal year ended June 30, 2016, is composed of the
following:
Currencies Php 7,600
Coins 2,400
Paid vouchers:
Office supplies 3,500
Postage stamps 4,000
Loans to employees 12,000
Check drawn by the manager, returned by bank
marked “NSF”. 5,500
Check drawn by the company, payable to the
order of the petty cash custodian , representing
her salary 25,000

20. The amount of petty cash fund that would be shown on the statement of financial position at June 30,
2016 of Pau Company is __________.
a. Php10,000 c. Php40,500
b. Php35,000 d. Php60,000

7,600 + 2,400 + 25,000 = 35,000

Problem 17

Upon examination of the petty cash fund of Kapuso Company on June 3, 2017, the following
items were found:
Total bills and coins Php 18,250
Certified check of general manager
dated December 15, 2016 15,000
Petty cash vouchers (PCVs) not yet
replenished:
PCV No.0021 Postage stamps Php 2,800
PCV No.0022 Supplies 6,500
PCV No.0023 IOU employee 5,000
Company check representing replenishment
of petty cash fund 51,500
Unused stamps 1,200
An envelope containing contributions of
employees for the death of a fellow
employee (contents intact) 30,000

The petty cash fund was established for an amount of Php100,000.

21. What is the correct amount of petty cash fund at December, 2016?
a. Php99,050 c Php69,750
b. Php84,750 d. Php18,250.

18,250 + 15,000 + 51,500 = 84,750

22. What is the amount of cash shortage or overage?

a. Php950 shortage c. Php2,150 shortage
b. Php250 overage d. canot be determined

100,000 – (18,250+15,000+2,800+6,500+5,000 +51,500 = 99,050) = 950

Problem 18

In reconciling the book and bank balances of Pau Corporation, you discover the following for the
Month of December 2016:
Balance per bank statement Php 45,000
Balance per books 34,000
Receipts of December 31, 2016 not deposited
until January 3, 2017 10,000
Bank service charge for December 300

DAIF check returned with the December Bank statement, Php3,200.

A paid check for Php4,000 was recorded in the cash register as Php400.
Customer’s check for Php25,200 was recorded in the cash receipts journal as Php22,500.
Charges per bank statement included a check of Paul Company erroneously charged in the
amount of Php8,000.

23. Assuming no errors except as noted, the amount of outstanding checks is ________.
a. Php16,200 c. Php33,400
b. Php29,600 d. Php63,000

(34,000-300-3,200-3,600+2,700=29,600) – (45,000+10,000+8,000=63,000) =33,400

Problem 19

Mari Company reported a balance of Php86,000 in its cash account at the end of the month.
There were Php40,000 deposits in transit and Php30,000 of outstanding checks. The bank
statement showed a balance of Php100,000, service charges of Php12,000 and the proceeds of
note collected by the bank for the company. The note had a face value of Php30,000.

24. The interest on the note collected by the bank was _________.
a. Php24,0000 c. Php12,000
b. Php18,000 d. Php6,000

Bank = 100,000 +40,000-30,000 = Php 110,000

Book = 86,000-12,000+30,000 = 104,000
----------------------
Interest 6,000
=============

Problem 20

The following account balances are shown in the accounting records of Camil Company:

January 1, 2016 December 31, 2016

Cash Php 124,000
Accounts receivable 134,000 Php 182,000
Merchandise inventory 172,000 156,000
Accounts payable 106,000 96,000

Sales for 2016 amounted to Php1,596,000 while cost of goods sold was Php1,166,000. Cash
operating expenses amounted to Php214,000. All sales and purchases were made on credit.

25. Assuming that there were no other relevant transactions , what is the cash balance at December 31,
2016?
a. Php216,000 c. Php512,000
b. Php298,000 d. Php610,000

Collections = 134,000 + 1,596,000 – 182,000 = Php 1,548,000

Purchases = 1,166,000 + 156,000 – 172,000 = 1,150,000
 Payment = 1,150,000 + 106,000 – 96,000 = 1,160,000
Cash balance end = 124,000 + 1,548,000 – 1,160,000 – 214,000 = 298,000

Problem 21

In preparing its December 31, 2016 bank reconciliation, Mari Company has available the
following information:
Balance per bank statement, 12/31/16 Php 361,000
Deposits in transit, 12/31/16 65,000
Return on customer’s NSF check , 12/31/15 12,000
Outstanding checks, 12/31/15 55,000
Bank service charge for December 2,000

26. At December 31, 2016, Mari Company’s correct cash balance is __________.
a. Php385,000 c. Php359,000
b. Php371,000 d. Php357,000

361,000+65,000-55,000 = 371,000

Problem 22

Jemn C Company had the following cash balances at June 30 2016:

Petty cash fund Php 4,500
Customer’s certified check 15,000
Customer’s NSF check 6,000
Customer’s post dated check 12,000
Unrestricted demand deposits 1,458,000
Company checks written and deducted
from the demand deposits but not
scheduled to be mailed until 1/2/17 36,000
Time deposits restricted for use (expected use
In 2017) 900,000
In exchange for a guaranteed line of credit, Jemn C Company has agreed to maintain a minimum balance of
Php300,000 in its unrestricted demand deposits account.

27. How much should Jemn C report as “Cash” in its December 31, 2016 statement of financial position?
a. Php1,198,500 c. Php1,441,500
b. Php1,213,500 d. Php1,513,500.

4,500+15,000+1,458,000+36,000 = 1,513,500

Problem 23

Camila Company is making a four column bank reconciliation at December 31 from the
following data. The amounts per bank statement were: Balance November 30, Php650,000;
December Receipts, Php1,300,000; December Disbursements, Php1,100,000. The amounts
per books were: Balance November 30, Php763,500; December Receipts, Php1,154,800;
December Disbursements, Php 1,123,500; Balance, December 30, Php794,800.

November 30 December 31
Deposits in transit ? Php 150,000
Outstanding checks ? 84,000
The bank overlooked a check for Php7,500
when recording a deposit on Dec 10
Note collected by bank, recorded after
receiving the bank statement 180,000
Service charge, recorded after
receiving the bank statement 4,500 6,000
NSF checks, recorded after
receiving the bank statement 56,000 48,000
Camila recorded a Php37,400 check
received from a customer in December
as Php34,700.

28. The corrected cash balance on December 31 is _____________.

a. Php908,500 c. Php923,500
b. Php916,000 d. Php1,007,500.

29. The corrected December receipts is

a. Php1,157,500 c. Php1,334,800
 b. Php1,330,000 d. Php1,337,500

30. The corrected amount of December disbursements is

a. Php1,083,000 c. Php1,125,000
d. Php1,117,000 d. Php1,130,000

31. Deposits in transit, November 30

a. Php120,000 c. Php127,500
b. Php240,000 d. answer not given

32. Outstanding checks , November 30

a. Php67,000 c. Php120,000
b. Php70,000 d. answer not given

November Receipts Disbursements December

Bank 650,000 1,300,000 1,100,000 850,000
Deposits in transit
Nov 120,000 ( 120,000)
December 150,000 150,000
‘ Outstanding checks
Nov ( 67,000) ( 67,000)
Dec 84,000 ( 84,000)
Check overlooked 7,500 7,500
-----------------------------------------------------------------------------------
Adjusted Balances 703,000 1,337,500 1,117,000 923.500
===============================================

Book 763,500 1,154,800 1,123,500 794,800

Note collected
Dec 180,000 180,000
Service charge
Nov ( 4,500) ( 4,500)
Dec 6,000 ( 6,000)
NSF checks
Nov ( 56,000) ( 56,000)
Dec 48,000 ( 48,000)
Book error 2,700 2,700
---------------------------------------------------------------------------------
Adjusted Balances 703,000 1,337,500 1,117,000 923,500
===========================================

Problem 24

Reconciliation of Mari Company’s bank account at November 30 of the current year is :

Balance per bank statement Php 2,600,000
Deposits outstanding 300,000
Bank service charge 10,000
Erroneous bank charge 40,000
Outstanding checks ( 100,000)
Erroneous bank credit ( 60,000)
CM for collection of note ( 600,000)
-------------------------
Balance per book Php 2,190,000
==============
December data are as follows:
Bank Book
Checks recorded Php 2,200,000 Php 2,500,000
Correction of erroneous bank
Credit in November 60,000
Deposits recorded 1,600,000 1,800,000
Correction of erroneous bank charge 40,000
Service charge recorded 50,000
CM for collection by bank 550,000 600,000
NSF checks returned with December 31
Statement (will be redeposited) 100,000

33. How much is the total outstanding checks on December 31?

a. Php400,000 c. Php190,000
b. Php510,000 d. Php340,000
34. How much is the total deposits in transit on December 31?
` a. Php510,000 c. Php100,000
b. Php500,000 d. Php90,000

35. How much is the total adjusted cash receipts in December?

a. Php2,350,000 c. Php2,190,000
b. Php2,400,000 d. Php2,030,000

36. How much is the total adjusted cash disbursements in December?

a. Php2,650,000 c. Php2,500,000
b. Php2,410,000 d. Php2,350,000

37. How much is the total adjusted cash balance as of December 31?
a. Php2,480,000 c. Php2,370,000
b. Php2,280,000 d. Php2,490,000

November Receipts Disbursements December

Bank balance 2,600,000 2,190,000 2,410,000 2,380,000
Deposits Outstanding
November 300,000 ( 300,000)
December 500,000 500,000
Outstanding checks
November ( 100,000) ( 100,000)
December 400,000 ( 400,000)
Erroneous bank charge
November 40,000 ( 40,000)
Erroneous bank credit
November ( 60,000) ( 60,000)
----------------------------------------------------------------------------------
2,780,000 2,350,000 2,650,000 2,480,000
===============================================
Book Balance 2,190,000 2,400,000 2,500,000 2,090,000
Bank service charge
November ( 10,000) ( 10,000)
December 50,000 ( 50,000)
CM for collection
November 600,000 ( 600,000)
December 550,000 550,000
NSF checks 100,000 ( 100,000)
----------------------------------------------------------------------------------
2,780,000 2,350,000 2,650,000 2,480,000
===============================================

Bank Debit ; 2,200,000+60,000+50,000+100,000 = 2,410,000

Bank Credit; 1,600,000+40,000+50,000+550,000 = 2,190,000
Book Debit; 2,500,000
Book credit; 1,800,000+600,000 = 2,400,000

Problem 25

In your audit of the cash account of Mari company, you have ascertained the following data
relative to the debits per books and credits per bank:

Books debit in June Php 4,000,000

Bank credits in June 3,600,000
CM for interest earned in May but taken up
in the books in June 50,000
CM for interest earned in June but taken up in
the books in July 60,000
Check from customer in May amounting to Php400,000
but was taken up in the books as 40,000
Check from customer in June amounting to
Php200,000 but was taken in the books as 40,000
Check by the company issued to supplier in May
Amounting to Php30,000 but was taken up
in the books as 300,000
Erroneous bank credit-June 25,000
Erroneous bank charge – May 10,000
Deposits in transit-May 31 500,000

38. How much is the Deposits in transit at the end of June?

 a. Php475,000 c. Php155,000
b. Php315,000 d. Php465,000

Book receipts ,4,000,000-50,000+60,0000-360,000+160,000-270,000 = 3,540,000.

DIT, June = 3,540,000+25,000+10,000+500,000-3,600,000 = 475,000

Problem 26

Based on the following information, the causes of the discrepancies between the bank credits and bank debits are
ascertained:
Book credits February Php 858,000
Bank debits in February 976,500
Check issued on February 26 for Php57,000
erroneously recorded in the books of the
depositor as 75,000
Customer’s DAIF check, returned by the bank of
the depositor in February 23,000
January service charges, taken up in the books
in February 300
Payment of Credit card automatically debited by
the bank on February 10, as per ADA, but taken
up in the books of the depositor in March 30,000
Outstanding checks as of February 28 45,000

39. How much is the outstanding checks at the beginning of the period (end of January)?
a. Php45,000 c. Php53,000
b. Php128,800 d. Php118,800.

Book Disb (adjusted), 858,000-18,000+23,000-300+30,000 = 892,700

O/C, Jan, 892,700-45,000-976,500 = 128,800

Problem 27

In connection with your examination, Pau Company presented to you the following information
regarding its Cash in bank account for the month of September of the current year:

a. Balances per bank statements: August 31, Php1,250,000, and September 30, Php1,350,000
b. Balances of cash in bank account in company’s books: August 31, Php1,251,000 and September 30,
Php1,051,000.
c. Total charges in the bank statement during September were Php1,300,000.
d. Deposits in transit were: August 31, Php200,000 and September 30, Php153,000.
e. Outstanding checks as of August 31, Php150,000.
f. Erroneous bank credits were: August 31, Php45,000 and September 30, Php17,000.
g. Erroneous bank charge were: August 31, Php20,000 and September 30, Php30,000.
h. Collections by bank not recorded by company were Php125,000 in August and Php150,000 in
September.
i. NSF not entered in company’s books were: August 31, Php110,000 and September 30, Php75,000.
j. Customer’s check deposited in August amounting to Php21,000 was erroneously entered in the books as
Php12,000. Assume this was corrected in September 30.

40. How much were the cash disbursements per books in September?
a. Php1,365,000 c. Php1,500,000
b. Php1,491,000 d. Php1,565,000

41. How much are the outstanding checks at the end of September?
a. Php110,000 c. Php381,000
b. Php330,000 d. Php390,000

42. How much is the adjusted cash balance as of August 31?

a. Php1,257,000 c. Php1,275,000
b. Php1,266,000 d. Php1,291,000

43. How much is the adjusted book disbursements for September?

a. Php1,315,000 c. Php1,456,000
b. Php1,381,000 d. Php1,465,000

44. How much is the adjusted cash balance as of September 30?

a. Php1,126,000 c. Php1,276,000
b. Php1,135,000 d. Php1,346,000

August Receipts Disbursements September

Bank 1,250,000 1,400,000 1,300,000 1,350,000
DIT
Aug 200,000 ( 200,000)
September 153,000 153,000
O/C
Aug ( 150,000) ( 150,000)
September 390,000 ( 390,000)
Erroneous bank
Credits
Aug ( 45,000) ( 45,000)
Sept ( 17,000) ( 17,000)
Erroneous bank
Charges
Aug 20,000 ( 20,000)
September ( 30,000) 30,000
----------------------------------------------------------------------------------------
1,275,000 1,316,000 1,465,000 1,126,000
===================================================

Book 1,251,000 1,300,000 1,500,000 1,051,000

Collection by bank
Aug 125,000 ( 125,000)
September 150,000 150,000
NSF check
Aug ( 110,000) ( 110,000) -
September 75,000 ( 75,000)
Book error
(21,000-12,000) 9,000 ( 9,000)
---------------------------------------------------------------------------------------
1,275,000 1,316,000 1,465,000 1,126,000
=================================================

Problem 28

Taken from the record of Pau Company are the following:

Balance per bank statement, October 31 Php 18,400.00
Balance per bank statement, November 30 15,200.00
Total credits per bank statement, November 6,000,00
Balance per books, October 31 14,800.00
Total credits per books, November 20,800.00
Balance per books, November 30 6,400.00

Collection of note directly credited to Pau Company’s account

in October 2,000.00
Proceeds of loan directly credited to Pau Company’s account in
November – not yet recorded in the books 1,200.00
NSF checks returned in October 3,600.00
NSF checks returned in November – not yet recorded in the books 800.00
Checks received from a customer amounting to Php800 was
recorded in the books in October as 8,000.00
Check issued to a supplier amounting to Php400.00 was recorded
in the books in November as 4,000.00
Collections in November for Php5,200.00 was recorded as 1,200.00
Checks properly drawn for Php7,600 was recorded by
the bank in October as 760.00
Deposit amounting to Php6,000 was recorded by the bank
in November as 600.00
Deposits in transit – October 31 3,200.00
Outstanding checks – October 31 8,760.00

45. How much is the adjusted balance of cash?

a. Php14,400 c. Php13,600
b. Php10,600 d. Php16,400

46. How much are the month-end-month deposits in transit?

a. Php15,800 c. Php7,400
b. Php10,600 d. Php9,600

47. How much are the month-end outstanding checks?

a. Php22,000 c. Php12,400
b. Php13,600 d. Php16,400
 October 31 Receipts Disbursements November 30

Bank 18,400 6,000 9,200 15,200

Bank error
7,600-760 ( 6,840) ( 6,840)
6,000-600 5,400 5,400
Deposits in transit
October 3,200 ( 3,200)
November 7,400 7,400
Outstanding checks
October ( 8,760) ( 8,760)
Nov 13,600 ( 13,600)
-------------------------------------------------------------------------------
6,000 15,600 7,200 14,400
=============================================
Book 14,800 12,400 20,800 6,400
Note collected
-October 2,000 ( 2,000)
Proceeds 1,200 1,200
NSF-Oct ( 3,600) ( 3,600)
-Nov 800 ( 800)
Bank error
– Oct, 8,000-800 ( 7,200) ( 7,200)
-Nov, 5,200-1,200 4,000 4,000
Book error
-Nov, 4,000-400 ( 3,600) 3,600
------------------------------------------------------------------------------
6,000 15,600 7,200 14,400
=============================================

Problem 29

Data concerning the cash records of Pau Company for the months of November and December
2016 are shown below:
November 30 December 31
Book balance Php 22,400 Php -
Book debits 127,600
Book credits 112,800
Bank balance 60,000 81,600
Bank debits ?
Bank credits 109,200
Notes collected by bank 9,000 12,000
Bank service charge 80 400
NSF checks 3,520 5,600
Overstatement of check payment
of salaries 7,600 4,800
Deposits in transit 24,000 45,000
Outstanding checks 39,000 71,400
Deposit of Paula Corp. erroneously
credited to Pau Company’s account 9,600 7,200

48. How much is the unadjusted book balance as of December 31?

a. Php37,200 b. Php28,200 c. Php7,600 d. Php16,800

49. How much is the unadjusted bank disbursements in December?

a. Php76,800 b. Php88,600 c. Php81,700 d. Php87,600.

50. How much is the adjusted cash balance as of November 30?

a. Php35,400 b. Php12,000 c. Php38,400 d. Php40,400

51. How much is the adjusted cash receipts in December ?

a. Php123,000 b. Php246,000 c. Php143,000 d. Php122,400

52. How much is the adjusted cash disbursements in December?

a. Php114,000 b. Php110,400 c. Php48,000 d. Php114,400.

53. How much is the adjusted cash balance as of December 31?

a. Php38,400 b. Php38,600 c. Php48,400 d. Php48,000.

November Receipts Disbursements December

Bank 60,000 109,200 87,600 81,600
DIT
 Nov 24,000 ( 24,000)
Dec 45,000 45,000
O/C
Nov ( 39,000) ( 39,000)
Dec 71,400 ( 71,400)
Erroneous deposit
Nov ( 9,600) ( 9,600)
Dec ( 7,200) ( 7,200)
------------------------------------------------------------------------------
35,400 123,000 110,400 48,000
=============================================
Book 22,400 127,600 112,800 37,200
Notes collected
Nov 9,000 ( 9,000)
Dec 12,000 12,000
BSC
Nov ( 80) ( 80)
Dec 400 ( 400)
NSF Checks
Nov ( 3,520) ( 3,520)
Dec 5,600 ( 5,600)
Overstatement of
Check payt
Nov 7,600 ( 7,600)
Dec ( 4,800) 4,800
-------------------------------------------------------------------------------
35,400 123,000 110,400 48,000
=============================================

Problem 30

Camil Company is preparing its September 30, 2016 bank reconciliation. Relevant information
is shown below:
Balance per books Php 6,960
Balance per bank statement 8,000
Collection on note by bank (including 200 interest) 4,600
NSF check returned by bank 2,400
Bank service charge for December 80
Deposits in transit 3,120
Outstanding checks (including certified
checks of Php400) 4,000

 Collection on receivable of Php1,800 was erroneously recorded by Camil Company as Php2,160. The
actual amount deposited of Php1,800.00 was correctly credited by the in
Camil Company’s bank account.
 Amortization of loan by Pau Company amounting to Php1,200.00 was erroneously debited by the bank
from Camil Company’s bank account.

54. How much is the adjusted balance of cash?

a. Php9,120 c. Php7,820
b. Php8,720 d. Php7,650

55. Outstanding checks (inclusive of Certified check), September 30?

a. Php3,600 c. Php4,000
b. Php4,400 d. Php3,200

(3,600 + 400 = 4,000)

Books Bank
Balances Php 6,960 Php 8,000
Collection of notes 4,600
NSF check return ( 2,400)
Bank service charge ( 80)
Deposits in transit 3,120
Outstanding checks ? (3,600)
Book error
(2,160-1,800) ( 360)
Erroneously debited 1,200
-----------------------------------------------
Adjusted Balances Php 8,720 8,720
==========================