CHAPTER 17

PROOF OF CASH
June 30:
Adapted) on
Problem 17-1 (AICPA
reconciliation

bank 3,000,000
following
Lazer Company had the 400,000
statement,
June 30
bank 3,400,000
Balance per
Deposit in transit 900,000)
Total 2,500,000
Outstanding checks
June 30
Balance per book. showed
the-following:

statement for the

month of July 9,000,000
collected for Lazer
The bank
check
P200,000 note customer

Deposits, including
NSF 7,000,000
Disbursements,
including P140,000
service charge
and P10,000
the bank July. The
inamounted
items on June 30 cleared through transit
All reconciling and the deposit in
P600,000
checks totaled
outstanding
to P1,000,000 on July 31. 31?
bank on July
1. What is the adjusted cash in
a. 2,500,000
b. 5,400,000
C. 2.900,000
d. 5.000,000
balance per book on July 31?
2 What is the cash
a. 5.400,000
5.350,000

C. 5,550,000
d. 4.500,000
cash receipts per book in July?
3. What is the amount of
a 9,400,000
b. 9,600,000
8,600,000
d. 9.800,000

4. What istheamount
of cash disbursements per book in July?
a 6.550,000
6700,000
7,300,000
C.
d. 6,850,000

206
Solution 17-1

Ouestion I Answer b

Balance per bank June 30 CAo

July bank deposits 3,000,000
July bank disbursements 9,000,000
Balance per bank - July 31 ( 7,000,000)
July deposit in transit 5,000,0000
July outstanding checks (le) 1,000,000
600,000)
Adjusted bank balance
5.400,000
Question 2 Answer b
Balance per book -

July 31 (SQUEEZE)
Note collected by bank in July 5,350,000
NSF customer check in July 200,000
Service charge in July 140,000)
10,000)
Adjusted book balance
5,400,000
The balance per book on July 31 is "squeezed" by working back from
the adjusted balance.

Question 3 Answer a
Deposits per bank statement for July 9,000,000
Note collected by bank in July
Deposit in transit-June 3
200,000)
400,000)
Deposit in transit -July 31 1,000,000
Cash receipts per book for July 9,400,0000
Question 4 Answer g
Disbursements per bank statement for July 7,000,000
NSF check in 140,000)
July
Service charge in July 10,000)
Outstanding checks -

June 30 900,000)
Outstanding checks- July 31 600,000
Cash disbursements per book for July 6,550,000
Proof of the cash balance per book - July 31

Balance per book -

June 30 2,500,000
Book receipts for July 9,400,000
Book disbursements for July (6,550,000)
Balance per book - July 31
5.350,000

207
Problem 17-2 (AICPA Adapted)
reconciliation for the
bank
ris Company presented the following
month of November:
3,600,0000
Balance per bank statement, November 30 800,000
Add: Deposit in transit
4,400,0000
1,200,000
Less: Outstanding checks
Bank credit recorded in error 200,000 1,400,000
Balance per book, November 30 3,000,000

December follow:
Data per bank statement for the month of

December deposits, including note 5,500,000

collected of P1,000,000 for Chris check
December disbursements, including NSF customer 4,400,0000
P350,000 and service charge PS0,000
All items that were outstanding on November 30 cleared through the
bank in December, including the bank credit
In addition, checks amounting to P500,000 were outstanding and
deposits ofP700,000 were in transit on December 31.
1. Whatistheadjusted cash in bank on December 31?
a. 4,700,000
b. 4,900,000
c. 4,500,000
d. 3,200,000
22. Whatisthe cash balance per ledger on December 31?
a. 4,100,000
b. 4,900,000
C. 4,700,000
d. 4,300,000
3.
3. What is the amount of cash receipts per book in December?
a. 5,400,000
b. 4,400,000
5,500,000
d. 6,400,000
4.
4. What is the amount of cash disbursements per book in December?
a. 3,700,000
b. 3,300,000
e 3,100,000
d. 3,500,000

208
 Solution 17-2
Ouestion 1 Answer b

Balance per bank November 30

December deposits 3,600,000
5,500.0000
Total
December disbursements 9,100,000
(4.400,000)
Balance per bank December 31 -

Deposit in transit December

- 4,700,000
Outstanding checks -

December
700,000
500,000)
Adjusted bank balance -

December 31 4.900,000
Question 2 Answer d
Balance per book December 31
-

Note collected by bank (SQUEEZE) 4,300,000

NSF customer check 1,000,000
Service charge 350,000)
(50,000)
Adjusted book balance
4,900,000
Ouestion 3 Answer b
December bank deposits
Note collected 5,500,000
by bank in December (1,000,000)
Deposit in transit - November 30
Deposit in transit - December 31 800,000)
700,000
December book receipts
4,400,000
Ouestion 4 Answerc
December bank disbursements 4,400,000
NSF check in December
(350,000)
Service charge in December 50,000)
Outstanding checks- November 30 (1,200,000)
Erroneous bank credit in November
(200,000)
Outstanding checks December 31 -

500,000
December book disbursements 3,100,000
Proof of cash balance per book- December 31
Balance per book -
November 30 3,000,000
December book receipts 4,400,000
December book disbursements (3,100,000)
Balance per book December 31
4,300,000
209
Problem 17-3 (AICPA Adapted)
bank reconciliation.
Lira Company prepared the following on June 30
Balance per bank
Deposits in transit 9,800,400,000
000
Outstanding checks
(1,400,000)
Balance per book
8,800,000
and charges for disbursa
There were total deposits of P6,500,000
statement. All reconciliation ites
of P9,000,000 for July per bank on
cleared the bank on July 31.
June 30
and deposits in tranod
Checks outstanding amounted to P1,000,000
totaled P1,200,000 on July 31.
What is the amount of cash receipts per book in July?
1.
a. 6,500,000
b. 7,300,000
C. 5,700,000
d. 7,900,000
2. What is the amount of cash disbursements per book in July?
2
-a 8,600,000
b. 7,600,000
C. 9,400,000
d. 8,400,000

3.
3 What is the adjusted cash in bank on July 31?
a. 7,300,000
b. 6,300,000
e. 7,500,000
d. 6,500,000

4. What is the cash balance per ledger on July 31?

a. 8,800,000
b. 8,500,000
C. 6,300,000
d. 7,500,000

210
Solution 17-3

Ouestion l Answerb

Bank receipts for July

Deposits in transit - June 30
6,500,000
Deposits in transit - July 31
(400,000))
1,200,000
Book receipts in July 7,300,000

Question 2 Answera

Bank disbursements for July 9,000,000

Outstanding checks - June 30
(1,400,000)
Outstanding checks - July 31
1,000,000
Book disbursements for July 8,600,000

Question 3. Answerc
Balance per bank - June 30
9,800,000
Bank receipts for July 6,500,000
Bank disbursements for July (9,000,000)
Balance per bank -July 31 7,300,000
1,200,000
Deposits in transit July 31
-

(1,000,000)
Outstanding checks July 31
-

balance -July 31 7,500,000

Adjusted bank
Question 4 Answerd

Balance per book -

June 30 8,800,000D
Book receipts for July 7,300,000
Book disbursements for July (8,600,000)

Balance per book

-

July 31 7,500,000

July 31 is also the adjusted book

The balance per book
on

are no book reconciling items

balance because there

211
Problem 17-4 (AICPA Adapted)
Oro Company had the following bank reconciliation on March 31

Balance per bank statement, March 31 4,650,000

Add: Deposits in transit 1,030,000
Total 5.680,000
Less: Outstanding checks 1,260,000
Balance per book, March 3 1 4,420,000
Data per bank statement for the month ofApril:
Deposits 5,840,000
Disbursements 4,970,000

All reconciliation items on March 31 cleared through the bank inApril.

Outstanding checks on April 30 totaled P700,000 and there were no
deposits in transit on April 30.

What is the cash balance per book on April 30?

a 4,820,000
b. 5,290,000
c. 5,520,000
d. 5,850,000

Solution 17-4 Answer a

Balance per bank - March 31
4,650,000
Bank deposits April
-

5,840,000
Bank disbursements April
(4,970,000)
Balance per bank - April 30
5,520,000
Outstanding checks - April 30
( 700,000)
Adjusted cash in bank - April 30
4,820,000

The adjusted cash in bank on April 30 is also the cash balance per
book on April 30 because there are no book reconciling items.

212
 Problem 17-5 (AICPA Adapted)
Oueen Company reported the following bank
month of November: reconciliation for the
Balance per bank statement
Deposit in transit
November 30 1,804,000
415,000
Outstanding checks
Bank credit recorded in error (630,000)
2,000)
Balance per book, November 30 1,587,000
Data per bank for the month of December
December deposits 2,610,000
December disbursements 2,242,000
All items that were outstanding on November 30 cleared through
the bank in December, including the bank credit.
Inaddition, checks of P250,000 were outstanding on December 31.

What is the balance of cash per book on December 31?

a1,922,000
b. 1,924,000
c. 2,172,000
d. 2,422,000

Solution 17-5 Answer a

Balance per bank - November 30 1,804,000
December bank deposits 2,610,000
December bank disbursements 2,242,000)
Balance per bank -
December 31 2,172,000
checks December 31 (250,000)
Outstanding -

December 31 1,922,000
Adjusted cash in bank
-

The adjusted cash in bank on December31 is also the cash balance

per book on December 31 because there are no book reconciling
items.

213
Problem 17-6 (PHILCPA Adapted)
bank
reconciliation on May 31:
LOmpany provided the following
2,100.000
Balance per bank statement 300,000
Deposits outstanding 30,000)
Checks outstanding
2,370,000
Correct cash balance
2,372,000
Balance per book 2,000)
Bank service charge
2,370,000
Correet cash balance

Data for the month of June:

Bank Book

2,300,000 2,360,000
Checks recorded 1,620,000 1,800,000
Deposits 'recorded
Collection by bank, P400,000 note 420,000
plus interest
NSF check returned with June 30
statement 10,000
1,830,000 1,810,000
Balances
30?
1. What is the amount of checksoutstanding on June
a. 30,000
90,000
C. 60.000
d. 0

2.
2 What is the amount of deposits in transit on June 30?
A 480,000
b. 120.000
C. 180.000
d. 680,000

3 What is the adjusted cash in bank on June 30?

a. 1,810,000
b2,220,000

c.
C. 2,240,000
d. 2,780,000

214
Solution 17-6

Ouestion 1 Answer b
Checks outstanding - May 31
30,000
Checks recorded by book in June 2,360,000
Total 2,390,000
Checks recorded by bank in June
(2,300,000)
Checks outstanding- June 30 90,000

Ouestion 2 Answer a
Deposits in transit May 31
-

300,000
Deposits recorded by book -

June 1,800,000
Total 2,100,000
Deposits recorded by bank -

June (1,620,000)
Deposits in transit - June 30 480,000

Ouestion 3 Answer b
Balance per bank - June 30 1,830,000
June 30 480,000
Deposits in transit -

Outstanding checks June 30 -

90,000)
Adjusted bank balance 2,220,000

1,810,0000
Balance per book
Note collected by bank 420,000
NSF check 10,000)

Adjusted book balance 2,220,000

215
 A b Pai
Problem 17-7 (LAA)
information for October and
YSIde Company provided the following
November:
Checks and charges recorded by bank in November,
Including a November service charge of P4,000 550,000
and NSF check of P20,000
Service charge made by bank in October and

recorded by depositor in November 2,000

credits journals during November
cash in all 620,000
otal to
Customer NSF check returned in October and
redeposited in November but no entry made by 40,000
depositor in either October or November
Outstanding checks on October 3I that
cleared in November 230,000
What is the amount of outstanding checks on November 30?

a. 282,000
b. 300,000
322,000
d. 302,000

Solution 17-7 Answer c

Checks and charges by bank in November 550,000
Service charge in November 4,000)
NSF check in November 20,000)
Checks paid by bank in November 526,000
Total credits to cash in all journals during November 620,000
Service charge in October recorded in November 2.000)
Checks issued by depositor in November 618,000
Outstanding checks - October 31
230,000
Total checks to be paid by bank 848,000
Checks paid by bank in November (526,000)
Outstanding checks - November 30
322,000

The customer NSF check in October and redeposited in November 1s

ignored in the computation because no entry was made by depositor i"
either October or November.

216