Sample/practice exam 15 October 2020, questions and answers PDF

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CHAPTER 13Chapter 15 Bank Reconciliation Basic ProblemsProblem 15- In preparing the bank reconciliation for the month of August, Apex Company provided the following information: Balance per bank 1,805, Deposit in transit 325, Return of customer’s check for insufficient fund 60, Outstanding checks 27...

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1. What is the adjusted cash in bank? a. 1,575,000 b. 1,065,000

CHAPTER 13 Chapter 15 Bank Reconciliation Basic Problems Problem 15-1 In preparing the bank reconciliation for the month of August, Apex Company provided the following information: Balance per bank 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 What is the adjusted cash in bank? a. 1,855,000 c. 1,785,000 b. 1,795,000 d. 1,755,000 Answer: A Balance per bank Deposit in transit Total Outstanding checks Adjusted bank balance

1,805,000 325,000 2,130,000 (275,000) 1,855,000

Problem 15-2 In preparing the bank reconciliation for the month of December, Case Company provided the following data: Balance per bank statement 3,800,000 Deposit in transit 520,000 Amount erroneously credited by bank to Case’s account 40,000 Bank service charge for December 5,000 NSF Check 50,000 Outstanding checks 675,000 1. What is the adjusted cash in bank? a. 3,685,000 b. 3,645,00

c. 3,600,000 d. 3,605,000

2. What is the unadjusted cash in bank balance per book? a. 3,550,000 c. 3,610,000 b. 3,660,000 d. 3,655,000 Answer 1: D Balance per bank statement Deposit in transit Bank error- erroneous bank credit Outstanding checks Adjusted bank balance Answer 2: B Unadjusted book balance (squeeze) Bank service charge NSF check Adjusted cash in bank balance

3,800,000 520,000 (40,000) (675,000) 3, 605,000

3,660,000 (5,000,000) (50,000) 3,605,000

Problem 15-3 Mindanao Company provided the following data for the month of December: Balance per book Balance per book Bank service charges Outstanding checks Deposit in transit Customer note collected by bank Interest on customer note Customer check returned NSF Depositor’s payment of note payable charged to account

1,000,000 3,000 235,000 300,000 375,000 15,000 62,000 250,000

c. 1,075,000 d. 1,325,000

2. What is the unadjusted cash in bank per bank statement? a. 1,310,000 c. 775,000 b. 1,010,000 d. 945,000 Solution 15-3 Question 1 Answer c Question 2 Answer b Per book Bank service charges Note collected by bank Interest on note NSF Note charged to account Adjusted book balance Unadjusted balance per bank (SQUEEZE) Deposit in transit Outstanding checks Adjusted cash in bank

1,000,000 (3,000) 375,000 15,000 (62,000) (250,000) 1,075,000 1,010,000 300,000 (235,000) 1,075,000

Problem 15-4 (IAA) Core Company provided the following data for the purpose of reconciling the cash balance per book with the balance per bank statement on December31, 2016: Balance per book 850,000 Balance Per bank Statement 2,000,000 Outstanding cheeks, Including certified check ofP100,000 500, 000 Deposit in transit 200,000 December NSF cheecks (of which P50,000 had been redeposited and cleared on 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 What amount should be reported as cash in bank on December 31, 2016? a. 1,500,000 c. 1,800,000 b. 1,400,000 d. 1,450,000 Solution 15-4 Answer a Balance per bank Deposit in transit Outstanding checks (500,000-100,000) Erroneous bank credit Adjusted bank balance

2,000,000 200,000 (400,000) 300,000 1,500,000

Problem 15-5 (IAA) Aries Company kept all cash in a checking account. An examination of the accounting records and bank statement for the month of June 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 entity’s account. Checks outstanding on June 30 amount to P3 00,000. *Aries discovered that a check written in June for P200, 000 in payment of an account payable, had been recorded 1n the entity’ 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. What amount should be reported as cash in bank on June 30? a. 9,000,000 c. 9,360,000 b. 8,300,000 d. 9,180,000 Solution 15-5 Answer a Balance per book Note collected by bank Total Bank error (200,000-20,000) NSF check Service charge Adjusted book balance

8,500,000 950,000 9,450,000 (180,000) (250,000) (20,000) 9,000,000

Problem 15-6 (AICPA Adapted) Able Company received the bank statement for the month of March. However, the closing balance of the account was unreadable. Attempts to contact the bank after hours did not secure the desired information. 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 What is the cash balance per bank statement? a. 1,435,000 b. 1,532,000

c. 1,338,000 d. 1,557,000

Solution 15-6 Answer b February 28 book balance Note collected by bank Interest earned on note NSF check Bank service charges (2,000 + 3,000) Adjusted book balance Balance per bank statement (SQUEEZE) Deposit in transit Bank error erroneous charge Outstanding checks Adjusted bank balance

1,460,000 100,000 10,000 (130,000) (5,000) 1,435,000 1,532,000 85,000 20,000 (202,000) 1,435,000

Problem 15-7 (1AA) Stellar Company provided the bank statement for the month of December which included the following information: Ending balance, December 31 Bank service charge for December Interest paid by bank to Stellar Company for December

2,800,000 12,000 10,000

In comparing the bank statement to its own cash records, the entity found the following: Deposits made but not yet recorded by the bank Checks written and mailed but not yet recorded by the bank

350,000 650,000

In addition, the entity discovered that it had drawn and erroneously recorded a check for P46,000 that should have been recorded for P64,000. What is the cash balance per ledger on December 31? a. 2,500,000 c. 2,540,000 b. 2,520,000 d. 2,800,000

Solution 15-7 Answer b Balance per bank Deposits in transit Outstanding checks Adjusted bank balance Balance per ledger (SQUEEZE) Interest income Service charge Book error (64,000-46,000) Adjusted book balance

2,800,000 350,000 (650,000) 2,500,000 2,520,000 10,000 (12,000) (18,000) 2,500,000

Problem 15-8 (IAA) Letty Company provided the bank for the month of April which included the following information: Bank service charge for April 15,000 Check deposited by Letty during April was not collectible, and has been marked “NSF” by the bank and returned 40,000 In comparing the bank statement to its own records, the entity found the following: Deposits made but not yet recorded by bank 130,000 Checks written and mailed but not yet recorded by bank 100,000 A deposit in transit end outstanding checks have been properly recorded in the entity’s books. A customer check for P35,000 payable to Letty Company had not yet been deposited and had not been recorded by the entity. The cash in bank account balance per ledger is P920,000. What is the adjusted cash in bank on April 30? a. 900,000 b. 86,000 c. 930,000 d. 965,000 Solution 15-8 Answer a Balance per ledger Unrecorded customer check Bank service charge NSF check Adjusted book balance

920,000 35,000 (15,000) (40,000) 900,000

Problem 15-9 (IAA) Gallant Company showed a cash account balance of P4,500,000 at the month-end. The bank statement did not include a deposit of P230 000 made on the last day of the month. The bank statement showed a collection by the bank of P94,000 for the depositor and a customer check for P32,000 returned because it was NSF. A customer check for P45,000 was recorded by the depositor as P54,000, and a check written for P79,000 was recorded as P97,000. What amount should be reported as cash in hank? a. 4,765,000 b. 4,571,000 Solution 15-9 Answer b Balance per book Collection by bank NSF customer check Book error -customer check (54,000-45,000) Book error check written (97,000 -79,000) Adjusted book balance

c. 4,819,000 d. 4,801,000

4,500,000 94,000 (32,000) (9,000) 18,000 4,571,000

Margar Company discovered that a check written in December for P183,000 in payment of an account had been recorded as P138,000.

CHAPTER 16 BANK RECONCILIATION Comprehensive problems Problem 16-1 (PHILCPA Adapted) Divine Company prepared the following bank reconciliation on December 3 1, 2016: 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 issued in December 35,000 NSF check 110,000 345,000 Total 3,145,000 Less: Outstanding check 100,000 Note collected by bank including P15,000 interest 215,000 315,000 Balance per book 2,830,000

Included with the December 3 1 bank statement was an NSF check for P250,000 that Margar Company had received from a customer on December 20. The bank statement showed a P15,000 service charge for December. What is the adjusted cash in bank on December? a. 9,150,000 b. 9,240,000

c. 9,195,000 d. 9,215,000

Solution 16-2 Answer a Book balance Note collected by bank for the depositor Book error in recording check (183,000-138,000) NSF check Service charge Adjusted book balance

8,525,000 935,000 (45,000) (250,000) (15,000) 9,150,000

The entity had cash on hand P500,000 and petty cash fund P50,000 on December 31, 201 6.

Balance per bank Deposit in transit Checks outstanding Adjusted bank balance

8,470,000 950,000 (270,000) 9,150,000

1. What amount should be reported as cash in bank on December 31, 2016? a. 2,930,000 c. 2,895,000 b. 3,095,000 d. 3,130,000

Problem 16-3 (IAA) Ron Company provided the following data for the month of January:

2. What total amount of cash should be reported on December 31, 2016? a. 3,395,000 c. 3,445,000 b. 3,350,000 d. 3,380,000 Solution 16-1 Question 1 Answer c Balance per bank Deposit in transit Outstanding check Adjusted cash in bank

2,800,000 195,000 (100,000) 2,895,000

Balance per book Note collected by bank NSF check Book error Checkbook printing charge Adjusted cash in bank

2,830,000 215,000 (110,000) (35,000) (5,000) 2,895,000

Balance per book, January 31 Balance per bank statement, January 31 Collections on January 31 but undeposited NSF check received from a customer returned by the bank on February 5 with the January bank statement Checks outstanding on January 31 Bank debit memo for safety deposit box rental not recorded by depositor A creditor check for P30,000 was incorrectly recorded in the depositor’s book as A customer check for P200,000 was recorded by the depositor as The depositor neglected to make an entry in its books for a check drawn in payment of an account payable What is the adjusted cash in bank on January 31? a. 3,130,000 b. 3,500,000

3,130,000 3,500,000 550,000 50,000 650,000 5,000 300,000 20,000 125,000

c. 3,400,000 d. 2,950,000

Question 2 Answer C Adjusted cash in bank Cash on hand Petty cash fund Total cash

2,895,000 500,000 50, 000 3,445,000

Problem 16-2 (PHILCPA Adapted) Margar Company kept all cash in a checking account. An examination of of the accounting records and bank statement for the month of December revealed a bank statement balance of 8,740,000, and a book balance of 8,525,000. A deposit of P950 000 placed in the bank ‘s night depository on December 29 does not appear on the bank statement. Checks outstanding on December 31 amount to P270,000. The bank statement showed that on December 25 the bank collected a note for Margar Company and credited the proceeds of P935,000 to the entity’s account which included P35,000 interest.

Solution 16-3 Answer 6 Balance per book Overstatement of creditor check Understatement of customer check NSF check Bank debit memo for safety deposit box Unrecorded check Adjusted book balance

3,130,000 270,000 180,000 (50,000) (5,000) (125,000) 3,400,000

Balance per bank Undeposited collections Checks outstanding Adjusted Bank balance

3,500,000 550,000 (650,000) 3,400,000

Problem 16-4 (IAA) In reconciling the cash balance on December 31 with that shown in the bank statement, Sam Company provided the following information: Balance per bank statement 4,000,000 Balance per book 2,700,000 Outstanding checks 600,000 Deposit in transit 475,000

Service charge Proceeds of bank loan, December 1, discounted for 6 months at 12%, not recorded on Sam Company’s books Customer check charged back by bank for absence of counter signature Deposit of P100,000 incorrectly recorded by bank as Check of Sim Company charged by bank against Sam account Customer’s note collected by bank in favor of Company. Face 400,000 Interest 40,000 Total 440,000 Collection fee 5,000 Erroneous debit memo of December 28, to charge Sam account with settlement of bank loan Deposit of Sim Company credited to Sam account What is the adjusted cash in bank on December 31? a. 4,315,000 b. 3,925,000 Solution 16-4 Answer d Balance per book Add: Proceeds of bank loan Customer note collected by bank Total Less: Service charge Customer check charged back Adjusted book balance

10,000

940,000 50,000 10,000 150,000

435,000 200,000 300,000

c. 3,075,000 d. 4,015,000

2,700,000 940,000 435,000 10,000 50,000

1,375,000 4,075,000

Payment has been stopped on check number 555 which was drawn in payment of an account payable. The payee cannot be located. What is the adjusted cash in bank on August31? a. 1,240,000 b. 1,230,000 Solution 16-5 Answer a 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 761 762 763 764 765 Adjusted bank balance

c. 1,210,000 d. 1,200,000

130,000 20,000 10,000 5,500 85,000

55,000 40,000 25,000 65,000 50,000

Mcbride Company provided the following data pertaining to the cash transactions and bank account for the month of May:

Problem 16-5 (IAA) Susan Company showed the following information on August 31: Balance of cash in bank account 1,300,000 Balance of bank statement 1,200,000 Outstanding checks, August 31: Number 555 10,000 761 55,000 762 40,000 763 25,000 764 65,000 765 70,000 Receipts of August 31, deposited September Service charge for August NSF check received from a customer

What is the adjusted cash in bank? a. 3,000,000 b. 2,910,000

600,000 300,000

915,000 4,915,000 900,000 4,015,000

1,275,000 5,000 85,000

The cashier-bookkeeper had misappropriated P30,000 and an additional P10,000 by charging sales discounts and crediting accounts receivable. The stub for check number 765 and the invoice relating thereto showed that it was for P50,000. It was recorded incorrectly in the cash disbursements journal as P70,000. This check was drawn in payment of an account payable.

235,000 1,240,000

Problem 16-6 (PHILCPA Adapted) 60,000 4,015,000

4,000,000 475,000 90,000 150,000 200,000

90,000 1,240,000 1,200,000 275,000 1,475,000

Cash balance per accounting record Cash balance per bank statement Bank service charge Debit memo for the cost of printed checks delivered by the bank; the charge has not been recorded in the accounting record Outstanding checks Deposit of May 30 not recorded by bank until June1 Proceeds of a bank loan on May 30, not recorded in the accounting record, net of interest of P30,000 Proceeds from a customer promissory note, principal amount P800,000 collected by the bank not taken up in the accounting record with interest Check No. 1086 issued to a supplier entered in the accounting record as P210,000 but deducted in the bank statement at an erroneous amount of Stolen check lacking an authorized signature deducted from Mcbride’s account by the bank in error Customer check returned by the bank marked NSF, indicating that the customer balance was not adequate to cover the check; no entry has been made in the accounting record to record the returned check

Balance per bank Add: Deposit in transit Incorrect deposit Erroneous bank charge Erroneous debit memo Total Less: Outstanding checks Erroneous bank credit Adjusted bank balance

30,000 1,330,000

Solution 16-6 Answer a Balance per book Service charge Debit memo for printed checks Proceeds of bank loan Proceeds of customer note NSF customer check Adjusted book balance

1,719,000 3 195 000 10, 000

12,000 685,000 500,000 570,000

810,000

120,000 80,000

77,000

c. 3,080,000 d. 2,990,000

1,719,000 (10,000) (12,000) 570,000 810,000 (77,000) 3,000,000

Balance per bank Outstanding checks Deposit in transit Bank error in recording check Stolen check deducted by bank in error Adjusted bank balance

3,195,000 (685,000) 500,000 (90,000) 80,000 3,000,000

Problem 16-7 (IAA) Grass Company provided the following information: Balance per bank statement July 31 Balance per ledger, July 31 Deposit of July 30 not recorded by bank Debit memo service charges Credit memo collection of note by bank for Grass Outstanding checks

1,240,000 750,000 280,000 10,000 300,000 550,000

An analysis of the canceled checks returned with the Bank statement revealed the following: *Check for purchase of supplies was drawn for P60,000 but was recorded as P90,000. *The manager wrote a check for traveling expenses of P 1 00,000 while out of town. The check was not recorded. What amount of cash in bank should be reported on July 31? a. 970,000 c. 550,000 b. 270,000 d. 610,000 Solution 16-7 Answer a Balance per ledger Service charges Collection of note Book error in recording check (90,000-60,000) Unrecorded check for traveling expenses Adjusted book balance Balance per bank Deposit in transit Outstanding checks Adjusted bank balance

750,000 (10,000) 300,000 30,000 (100,000) 970,000 1,240,000 280,000 (550,000) 970,000...