CCE AND BANK RECON

1. The following information pertains to Bustos Company as of December 31, 2005:

Cash balance per general ledger P15,000,000

Cash balance per bank statement 14,550,000
Checksoutstanding (including certified check of P100,000) 1,000,000
Bank service charge shown in December bank statement 50,000
Error made by Bustos in recording a check that cleared the bank in
December (check was drawn in December for P500,000
but recorded at P700,000) 200,000
Deposit in transit 1,500,000

 At the December 31, 2005 balance sheet cash in bank should be
a. P15,150,000 
P15,150,000  c. P14,250,000
b. P14,650,000 d. P14,550,000

2. Bocaue Company had the following account balances on December 31, 2005.

Petty cash fund P50,000

Cash in bank –
bank  –  current account 10,000,000
Cash in bank –
bank  –  payroll account 2,000,000
Cash on hand 500,000
Cash in bank –
bank  – restricted
 restricted account for plant additions, expected to
be disbursed in 2006 4,000,000
Treasury bills, due February 15, 2006 3,000,000

The petty cash fund includes unreplenished December 2005 petty cash expense vouchers of P20,000 and employee
IOUs of P10,000. The cash on hand includes a P100,000 check payable to Bocaue dated January 15, 2006. What
should be reported as “cash and cash equivalents” on December 31, 2005?  
a. P12,420,000 c. P15,420,000
b. P19,420,000 d. P15,450,000

3. The following data pertain to Balagtas Corporation on December 31, 2005:

Checkbook
Bank balance
statement balance P10,000,000
15,000,000
Check drawn on Balagtas’ account, payable to supplier, dated and recorded on
Dec. 31, 2005, but not mailed until Jan. 15, 2006 3,000,000
Cash in sinking fund 4,000,000
Money market, three months due January 31, 2006 5,000,000

On December 31, 2005, how much should be reported as “cash and cash equivalents”?  
a. P13,000,000 c. P18,000,000
b. P12,000,000 d. P17,000,000
 

CCE AND BANK RECON

In your audit of National Inc.’s cash account as of December 31, 2007, you ascertained the following information:
information:  
The book keeper’s bank reconciliation on November 30,2007, is as follows:  
Bank balance per bank statement, November 30 P24,298
 Add: Deposit in transit 3,648
Total P27,946
Less: Outstanding checks
No. 3408 P440
3413 300
3414 6,820
3416 3,924
3417 800 12,284
Balance P15,662
 Add: Bank service charge for Nov. 36*
Balance per books P15698
*Entered in check register in Dec.
The cash receipts journal shows a total receipts for December of P371,766. The check register reflects total checks
issued in December of P377,632. A collection of P5,912 was recorded on company books on Dec. 31 was not
deposited until Jan. 2,2008.
The balance per bank statement at Dec. 31,2007 is P17,516. The statement shows total receipts of P373,502 and
checks paid of P380,284.
Your examination revealed the following additional information:
   Check no no.3413
.3413 dated Nov. 24,2007, was entered in the Check Register as P300. Your examination of the paid
returned with the December bank statement reveals that the amount of the check is P30.
   Check no. 3417 was mutilated and returned by the payee. A replacement check(no.3453) was issued. Bothe
checks were entered in the Check register but no entry was made to cancel check no. 3417.
  The Dec. bank statement includ
includes
es an erroneous bank charge of P48
P480.
0.
  On Jan. 3, 2008, the bank informed your client that a Dec. bank charge of P423 was omitted from the statement.
  Your examination of the bank credit memo accompanying the Dec. bank statement discloses that it represents
proceeds from the note collection in Dec. for P4,000.
  The outstanding checks at Dec. 31,2007, are as follows:
No. 3468 P440
No.3417 800
No.3418 2,814
No.3419 5,788

4.What is the total book disbursements for the month of December?

a.377,668 b.377,710 c.377,632 d.377,596

5.What is the book balance at Dec. 31:

a.9,832 b.9,868 c.9,754 d.9,796

6.What is the total outstanding checks at Dec.31?

a.8,602 b.9,072 c.9,042 d.9,842

7. What is the adjusted bank balance on Nov. 30?

a. 16,690 b.16,732 c.16,804 d.16,774

8. What is the adjusted book receipts for the month of Dec.?

a.375,724 b.371,766 c.371,238 d.375,766

9. What is the adjusted book disbursements for the month of Dec.?

a.377,590 b.377,662 c.377,674 d.377,632

10. What is the adjusted book balance on Dec.31??

a.14,824  
a.14,824 b.14,866 c.14,908 d.14,782
 

CCE AND BANK RECON

11
11.. Reconciliation of Malolos Corporation’s bank account at November 30, 2005 follows: 
follows:  
Balance per bank statement P3,150,000
Deposits in transit 450,000
Checks outstanding (45,000)
Correct cash balance P3,555,000

Balance per books P3,558,000

Bank service charge (3,000)
Correct cash balance P3,555,000

December data are as follows:

Bank Books
Checks recorded P3,450,000 P3,540,000
Deposits recorded 2,430,000 2,700,000
Collection by bank (P600,000 plus interest) 630,000 -
NSF check returned with December bank statement 15,000 -
Balances 2,745,000 2,715,000

The checks outstanding on December 31, 2005 amount to

a. P45,000 P135,000 
b. P135,000  c. P90,000 d. P0

12. The petty cash fund of Guiguinto Company on December 31, 2005 is composed of the following:

Coins and currencies P14,000

Petty cash vouchers:
Gasoline payments 3,000
Supplies 1,000
Cash advances to employees 2,000
Employee’s check returned by bank marked NSF 5,000
5,000  
Check drawn by the company payable to the order of Kristine
 Anson, petty cash custodian, representing her salary
salar y 20,000
 A sheet of paper with names of employees together with contribution
contribut ion
for a birthday gift of a co-employee in the amount of 8,000

Total P53,000

The petty cash ledger account has an imprest balance of P50,000. What is the correct amount of petty cash on
December 31, 2005?
a. P34,000 b. P39,000 c. P14,000 d. P42,000

13. Blue Company has the following cash balances at December 31, 2002:
Undeposited coins and currency P 35,000
Unrestricted demand deposits 1,450,000
Company checks written (and deducted from the demand
deposits amount) but not scheduled to be delivered
until January 6, 2003 180,000
Time deposits restricted for use (expected use in 2003) 3,000,000

The unrestricted demand deposits included P150,000 compensating balance but not legally restricted as to
withdrawal.
How much should Blue report as cash in its December 31, 2002 balance sheet?
(a) P1,665,000
P1,665,000   (b) P1,515,000 (c) P1,520,000 (d) P1,335,000
 

CCE AND BANK RECON

14. You
You noted the following composition of Hagonoy Company’s “cash account” as of December 31, 2005:  

Demand deposit account P2,000,000

Time deposit –
deposit –  30 days 1,000,000
NSF check of customer 40,000
Money market placement (due June 30, 2006) 1,500,000
Savings deposit in a closed bank 100,000
IOU from employee 20,000
Pension fund 3,000,000
Petty cash fund 10,000
Customer check dated January 1, 2006 50,000
Customer check outstanding for 18 months 40,000
Total P7,760,000

 Additional information follows:

f ollows:

  Check of P200,000 in payment of accounts payable was recorded on December 31, 2005 but mailed to suppliers
on January 5, 2006.
  Check of P100,000 dated January 15, 2006 in payment of accounts payable was recorded and mailed on
December 31, 2005.
  The co
company
mpany uses
uses the calendar year.
year. The cash receipts journal was held
held open until January 15, 2006, during
which time P400,000 was collected and recorded on December 31, 2005.

The cash and cash equivalents to be shown on the December 31, 2005 balance sheet is
a. P3,310,000 c. P1,910,000
P2,910,000  
b. P2,910,000 d. P4,410,000

15. A cash count on the morning of January 2, 2002 showed the following items in the petty cash box of Tray Corporation:
Currencies and coins counted P12,560
Envelope containing contributions to employee’s party 
party   90,000
 Approved and paid petty cash vouchers 14,500
Employee’s IOUs 
IOUs   180,000
Company check for fund replenishment 92,000
The petty cash fund was established for an amount of P300,000. What is the correct amount of petty cash on the
balance sheet as of December 31, 2002?
(a) P300,000 (b) P12,560 (c) P104,560
P104,560   (d) P13,500

16. Bugoy’s checkbook balance at December 31, 2002 was was P50,000. In addition, Bugoy had the following items in its
safe on that date:
  Check pay
 payable
able to B
Bugoy,
ugoy, dated December 31, 2 2002,
002, in payment of a sale made in December 2002 not
included in December 31 checkbook balance, P20,000.
  Check payable to Bugoy, deposited De
 December
cember but returned by bank on December 30 marked NSF. The
deposit and the return were both reflected in the checkbook, P5,000.
  Check drawn on Bugoy’s account, payable to a vendor, dated D ecember 30 but not mailed to payee as of


December 31, 2002. The check of P3,000 is not yet recorded.

The proper amount to be shown as cash on Bugoy’s balance sheet at December 31, 2002 is:  
(a) P48,000 (b) P65,000 (c) P68,000 P70,000  
(d) P70,000
 

CCE AND BANK RECON

17.Cure Co
Company’s
mpany’s newly hired assistant prepared the following bank reconciliation on March 31, 2002: 
2002:  
Book balance P1,405,000
 Add: March 31 deposit P 750,000
Collection of note 2,500,000
Interest on note 150,000 3,400,000
Total P4,805,000
Less: Care Company’s deposit to  to 
our account P1,100,000
Bank service charge 45,000 1,145,000
 Adjusted book balance P3,660,000

Bank balance P5,630,000

 Add: Error on check no. 123 45,000
Total P5,675,000
Less: Preauthorized payments for
light and water bills P 205,000
NSF checks 220,000
Outstanding checks 1,650,000 2,075,000
 Adjusted bank balance P3,600,000

Check No. 123 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. Cure authorized the bank to automatically pay its light and water bills as
submitted directly to the bank. The correct cash in bank balance is:
(a) P3,660,000 (b) P3,600,000 (c) P3,630,000 
P3,630,000  (d) P2,880,000

18. Apache Company provides the following information for the purpose of reconciling the cash balance per book with
balance per bank statement on December 31, 2001.
  The bank statement showed a balance of P200,000 on December 31.
  Outstanding che
checks
cks as of D
December
ecember 31 amounted to P50,000, including a P10,000 certified check.
  Deposit in transit on December 31 was P20,000.
  During December, the bank charged back
back NSF checks of P15,000, of which P5,000 had been redeposited and
cleared by December 27.
  On December 23, the bank erroneously credited the account of Apache for P30,000 representing proceeds of
loan granted to another company.
  During December, the proceeds from notes collected by the bank for Apache amounted to P75,000, net of
service charge of P2,000.
What is the cash balance to be shown on the balance sheet on December 31, 2001?
(a) P140,000 (b) P85,000 P150,000  
(c) P150,000 (d) P180,000

19. In an audit of Selena Company on December 31, 2009, the following information is gathered:
Balance per book 6,700,000
Customer’s  nsf check
Customer’s 200,000
Depositor’s note charged to account 650,000
Customer’s note collected by bank 120,000
Outstanding checks 800,000
Checkbook printing charge 2,000
Certified checks included in the outstanding checks 100,000
Deposit in transit 1,200,000
Interest earned on deposits net of 20% final tax 32,000
The adjusted cash in bank of Selena Company on December 31, 2009 is
a. 6,050,000 b. 6,700,000 6,000,000  
c. 6,000,000 d. 5,300,000
 

CCE AND BANK RECON

20. The balance sheet at December 31, 2006 of Mall Company showed a cash balance of P91,750. An examination of
the books disclosed the following:

  Cash sales of P12,000 from January 1 to 7 were pre-dated as of December 28, 31, 2006 and charged to the
cash account.
  Customer’s check totaling P4,500 deposited with and returned by the bank “NSF” on December 27, 2006
were not recorded in the books.

  Checks of P5,600 in payment of liabilities were prepared before December 31, 2006 and recorded in the
books, but withheld by the treasurer.
  Post-dated checks totaling P3,400 are being
Post-dated b eing held by the cashier as part of cash. The company’s experience
shows that post-dated checks are eventually realized.
  The cash account includes P20,000 being reserved for the purchased of a mini-computer which will be
delivered soon.
  Personal checks officers, P2,700 were “redeemed” on December 31, 2006, but returned to cashier on
January 2, 2007.

How much is the cash balance that should be shown in the December 31, 2006?

a. 91,750 b. 69,150 54,750 

c. 54,750  d. 43,550

21. Bayani Corp has the following information relating to cash at December

21. 
31, 2011:
Bank statement balance 2,500,000
Checkbook balance 2,600,000
Deposits in transit 700,000
Outstanding checks 200,000

Bayani's December 31, 2011 Balance Sheet should report cash as:

a.3,400,000 b.3,500,000 c.3,100,000 d. 3,000,000

22.  The petty cash fund account of Magiting Company showed the following:
22.

Coins and currency 5,500

Paid vouchers:
Transportation 200
Gasoline 150
Office supplies 250
Postage stamps 200
Due from employees 1,200

Digging deeper into the records, you realized that there is a Manager's
check returned by bank marked "NSF" for 1,000. There is also a check
drawn by company to the order of petty cash custodian amounting to 3,500.

What is the amount of the petty cash fund for balance sheet purposes?

a. 10,000 b.9,000
b.9,000   c.11,000 d.5,800
 

CCE AND BANK RECON

23. The current assets section of the balance sheet of Gregorio Corporation
consists of:

Bond sinking fund cash 1,500,000

Checking account in HSBC 3,265,000
Currency and coins awaiting deposit 1.635,000
Deposit in a bank closed by BSP 500,000
Petty cash fund (of which 100,000 in is the form of paid vouchers) 50,000
 Advances to officers and employees 200,000

The HSBC checking account has 250,000 check still outstanding per bank
statement. The petty cash fund has 5,000 worth of paid vouchers.

The correct cash balance that should be shown in the balance sheet is

a.4,950,000 b.4,600,000 c.4,595,000 d.4,945,000

24
24.. Diego Bandido Company's accounting data showed the following information as of December 31,2011:

Petty cash fund of 20,000 and undeposited receipts amounting to 1,400,000.

The undeposited collections includes a postdated customer check for 50,000.

Cash in Metrobank as per bank statement of 2,350,000 with a check for 30,000 still outstanding as of balance sheet
date.

There was a Bond sinking fund amounting to 900,000.

Unrecorded vouchers paid out of collections and IOUs signed by employees taken
also from collections amounted to 40,000 and 10,000 respectively.

Given the above data, what amount should cash on hand and in bank that
should be reported on the December 31, 2011 balance sheet?

a.3,740,000 b.4,670,000 c.3,690,000 d.3,770,000

25. Information pertaining to Trace Company for the month of August appears below:
Balance per bank statement P 310,000
Balance per books 187,500
Deposit in transit 70,000
Service charges 2,500
Note collected by bank 75,000
Outstanding checks ?

 An analysis of the cancelled checks returned with the

th e bank statement reveals the following:
a. Check for the purchase of merchandise was drawn for P155,000 but was recorded as P150,000.
b. The management wrote a check for traveling expenses of P25,000 while out of town. The check was

not amount
What is the recorded.
of outstanding checks on August 31, 2006?
a.P150,000  
a.P150,000 b.P140,000 c.P125,000 d.P230,000
 

CCE AND BANK RECON

Items 26 to 28 are based on the following:

You are conducting an audit of the MART CORPORATION for the year ended December 31, 2008. The internal
control procedures surrounding cash transactions were no nott adequate. Jane Quipit, the bookkeeper-cashier
handles cash receipts, maintains accounting records and prepares the monthly reconciliations of the bank
account. She prepared the following reconciliation at the end of the year:
Balance per bank statement P 315,000
 Add : Deposit in transit P157,725
Note collected by bank 13,500 171,225
Balance P 486,225
Less : Outstanding checks 222,075
Balance per general ledger P 264,150
In the process of your audit, you gathered the following:
a. At December 31, 2008, the bank statement and the general ledger showed balances of P315,000 and
P264,150 respectively.

b. The cut off bank statement showed a bank charge on January 02, 2009 for P35,250 representing a
correction of an erroneous bank credit.

c. Included in the list of outstanding checks were the following:

1. A check payable to a supplier, dated December 29, 29, 2008, in the amount of P13,275,
released on January 05, 2009.
2. A check representing advance payment to a supplier in the amount of P33,489, the date of
which is January 04, 2009, and released in December 2008.

d. On December 31, 2008, the company received and recorded customer’s postdated
check amounting to P45,000.

26. Compute the adjusted deposit in transit as of December 31, 2008.

a.P157,725 b.P112,725 c.P202,725 d.P112,500

27. Compute the adjusted outstanding checks as of December 31, 2008.

2008.  
a.P222,075 b.P235,350 c.P255,564 d.P175,311

28. Compute the adjusted cash to be presented in the balance sheet as at Dec. 31, 2008.
2008.  
a.P211,914 b.P225,414 c.P238,914 d.P279,414
 

CCE AND BANK RECON

29. Compute for the correct cash in bank balance given the following information for Wendell Company:

Balance per books Php725,420

Balance in checking account 661,454

Outstanding checks 75,690

Deposit in bank closed by Central Bank 325,000

Deposit in transit 139,876

Petty cash fund (of which Php6,890 is in the form of paid 10,000
vouchers)
Bank charges not yet taken up in the books 980

 Advances to employees 3,456

Bond sinking fund cash 400,000

Error in recording a check in the books. The correct

1,200
amount paid by the bank is Php7,980 instead of
Php9,180 recorded in the books, or a difference of

A.  765,240
B.  725,640
C.  755,240
D.  732,640

30. The August 31 bank statement of Orlando Inc. showed a balance of 113,000. Deducted in arriving at this
amount was a customer’s NSF check for 2,400 that had been returned. Orlando had received no prior notice
concerning this check. In addition to the bank statement, other records showed there were deposits in transit
totaling 17,200 and that outstanding totaled 10,800. What is the cash balance per books at August 31 (prior to
adjustments)?

a. 121,800 b. 115,400 c. 119,400 d. 117,000