ANGELES UNIVERSITY FOUNDATION

Angeles City, Pampanga

FAR/PRAC1 Integrated Review

CASH, BANK RECONCILIATION M. C. Cerda, CPA, MBA,RCA
O2018

1. Armada Company had the following accounts balances on December 31, 20x1:

Cash in bank ( current account ) P10,000,000

Cash in bank ( payroll account ) 2,000,000
Cash on hand 1,000,000
Cash in bank ( restricted for building construction
expected to be disbursed in 20x2 ) 6,000,000
Time deposits purchased December 31, 20x1 and due
March 15, 20x2 4,000,000
Petty cash fund 50,000

The cash on hand included a P400,000 check payable to Armada and dated
January 15, 20x2. The petty cash fund included unreplenished vouchers totaling
P20,000.

Total amount to be reported as cash and cash equivalents at 12/31/20x1 is:

A. 12,630,000 B. 13,050,000 C. 16,630,000 D. 16,650,000

2. On December 31, 20x1, the cash account of Brixton Company showed the
following details:

Undeposited collections P 120,000

Cash in bank ( BDO, checking account ) 600,000
Cash in bank ( BPI , overdraft ) ( 100,000 )
Undeposited NSF check from customer, dated
12/1/20x1 30,000
Undeposited check from a customer, dated 1/15/20x2 50,000
Cash in bank ( UCPB, payroll account ) 300,000
Cash in bank ( Metrobank, savings account ) 200,000
Cash in bank ( PSbank, money market 90-days ) 4,000,000
Cash in bank ( Foreign bank, restricted, ( equivalent
amount in pesos ) 200,000
IOUs from officers 60,000
Sinking fund cash 900,000
Trading securities 240,000

The BDO checking account requires a maintaining balance of P100,000. The

Metrobank savings account is intended to acquire an equipment in January 20x2.

On 12/31/20x1, total cash and cash equivalents to be reported is:

A. 1,420,000 B. 5,120,000 C. 5,340,000 D. 5,420,000
3. Centerstone Company had the followings accounts balances at December 31,
20x1:
Petty cash fund P 100,000
Cash in bank ( Chinabank, current account ) 8,000,000
Cash in bank ( Alliedbank, sinking fund ) 4,000,000
Cash on hand 1,000,000
Cash in bank ( Landbank, for plant addition to be
disbursed in 20x2 ) 3,000,000
Treasury bills ( 120 days ) 2,000,000

The petty cash fund included unreplenished vouchers of P200,000 and employees’
OUs of 10,000. The cash on hand included a customer check for P200,000 dated
January 15, 20x2. In exchange for a guaranteed line of credit, the entity agreed to
maintain a minimum balance of P400,000on its unrestricted Chinabank current
account. The sinking fund is set aside to settle a bonds payable due on January 30,
20x2.

The amount to be reported as cash and cash equivalents at 12/31/20x1 is:

A. 6,870,000 B. 8,870,000 C. 9,070,000 D. 12,870,000

4. Dexter Corporation provided the following information with respect to its cash
items on December 31, 20x1:
Checking account ( BDO account 1 ) ( P 400,000 )
Checking account ( BDO account 2 ) 7,000,000
Treasury bonds 2,000,000
Payroll account ( BPI ) 1,000,000
VAT account ( Metrobank ) 600,000
Foreign bank account (restricted, equivalent in pesos) 4,000,000
Postage stamps 100,000
Employee’s postdated check 600,000
IOUs from the company president 1,500,000
Credit memo for a purchase return 160,000
Traveller’s check 600,000
NSF check from a customer 300,000
Petty cash fund ( including unpreplenished voucher of
P60,000 ) 100,000
Money order 360,000
ATM savings account ( PSbank ) 200,000

Total unrestricted cash at 12/31/20x1 is:

A. 9,400,000 B. 10,000,000 C. 12,000,000 D. 14,000,000

5. Everest Inc. keeps all its cash items in a checking account. The accounting
records of the company and the bank statement for the month ended June 30,
20x1 showed the following:
 Cash balance per books, P17,000,000.
 A deposit of P2,000,000 made to the bank after bank closing time on June 30,
20x1 does not appear in the bank statement.
 The June 30, 20x1 bank statement showed that the ban k collected a customer
note of P500,000 and credited to the company’s account.
 Checks outstanding at June amounted to P600,000.
 A c heck written in June 20x1 for P400,000 had been recorded by the
company for P40,000.
 Included with the June bank statement is an NSF check for P500,000 dated
December 27, 20x1, and a bank service charge of P40,000.
The amount of cash to be reported by Everest at 12/31/20x1 is:
A. 16,600,000 B. 18,000,000 C. 18,360,000 D. 18,720,000

6. On April 30, 30x1, First Company received its bank statement which was
found to be unreadable. Attempts to contact the bank after bank hours to secure
the desired information proved futile. Hence, the company’s accountant
resorted to consider the following information for preparing the bank
reconciliation:

April 30, 20x1 book balance P2,920,000

Note collected by the bank 200,000
Interest earned to the company’s account 20,000
NSF check from a customer 260,000
Bank charge for the NSF check 4,000
Other bank charges 6,000
Outstanding checks 404,000
Undeposited collection 170,000
Check issued by Second Company erroneously
charged by bank against First Company 40,000
Check issued by First Company for P20,000
recorded by the company’s bookkeeper as 200,000

The cash balance per bank statement at 4/30/20x1 is:

A. 2,856,000 B. 3,050,000 C. 3,244,000 D. 3,294,000

7. On June 30, 20x1, the bank statement of Garage Company revealed a balance
of P7,470,000. The following data are considered in reconciling the bank
balance:

 The bank erroneously debited the company’s account for P42,000.

 During the month, the bank charged the company’s account for NSF check
amounting to P46,000, of which P16,000 had been re-deposited June 26.
 Collection at June 30, deposited first banking day of the following month,
P206,000.
 Outstanding checks at June 30 amounted to P604,000.
 Note collected by the bank from Garage’s customer was P160,000, with a
corresponding bank charge of 10,000.
The unadjusted cash in bank per ledger at 6/30/20x1 is:
A. 6,910,000 B. 6,994,000 C. 7,030,000 D. 7,114,000

8. Honduras Company keeps all of its cash items in a checking account. At

December 31, 20x1, the bank statement showed balance of P16,938, while the
company’s ledger showed P17,048,000. Additional information for bank
reconciliation purposes are as follows:
 A deposit of P1,900,000 was undeposited at December 31.
 Outstanding checks at December totaled P540,000.
 The bank statement showed that it collected a Honduras’ customer note and
credited the proceeds for P1,870,000, which included an interest of P70,000,
The company had not yet reflected this on the books.
 A check issued by Honduras to a creditor for P366,000 was recorded by the
company at P276,000.
 Included in the December bank statement was a charge of P500,000 for an
NSF check from the company’s customer. The bank also debited the
company’s account for a P30,000 service charge.
To correct the company’s account, the cash account should be adjusted on
12/31/20x1 with a:
A. Net debit to cash for P1,250,000.
B. Net debit to cash for P1,870,000.
C. Net credit to cash for P820,000.
D. Net credit to cash for P1,250,000.

9. Irish Company provided the following data for the month of July of the current
year:
 Balance per books, July 31 P6,260,000
 Balance per bank, July 31 7,000,000
 Collections on July 31 but still undeposited 1,100,000
 NSF check received from a customer returned by the
on July 27 100,000
 Outstanding checks, July 31 1,300,000
 Bank debit memo for cost of checkbook 10,000
 A check issued to a creditor for P60,000 erroneously
recorded by Irish as 600,000
 A check received from a customer for P400,000
erroneously recorded by Irish as 40,000
 A check drawn in payment of accounts payable
unrecorded in the books 250,000
The adjusted cash in bank at 7/31/20x1 is:
A.5,900,000 B. 6,260,000 C. 6,800,000 D. 7,000,000

10. The cash account in the ledger of Jerome Company shows a balance of
P3,304,000 at December 31, 20x1. The bank statement on same date shows a
balance of P4,180,000. The only reconciling items are bank charge of P4,000,
outstanding checks of P1,180,000 and deposit in transit.
How much is the deposit in transit at 12/31/20x1?
A.300,000 B. 308,000 C. 880,000 D. 1,184,000

11. Kerby Company provided the following information:

 Balance per bank statement, September 30, 20x1 P2,280,000
 Balance per ledger, September 30, 20x1 1,500,000
 Deposit of September 30, 20x1 not yet recorded by bank 760,000
 Bank service charge not yet recorded by Kerby 20,000
 Kerby’s note from a customer not yet recorded by Kerby 600,000
 Check issued by Kerby for the purchase of supplies for
P120,000 recorded by the company as 180,000
 A check issued for travelling expenses unrecorded in the books 200,000
How much is the outstanding checks at 9/30/20x1?
A. 540,000 B. 1,100,000 C. 1,220,000 D. 1,940,000

12. The cash account of Lexus Company showed a balance of P9,000,000 at

December 31, 20x1. The bank statement did not include a deposit of P460,000
made on the last day of December. The bank statement showed a bank
collection of Lexus’ customer’s note for P 648,00 and a NSF check of P64,000.
A customer’s check for P90,000 was recorded in the books for P108,000, and a
check payment for P158,000 was recorded as P194,000.

The correct cash balance at 12/31/20x1 is:

A. 9,142,000 B. 9,530,000 C. 9,602,000 D. 9,638,000
For questions 13 to 15
Miles Company provided the bank reconciliation at September 30, 20x1:

Balance per bank statement, 9/30/20x1 P6,000,000

Deposit in transit 800,000
Outstanding checks (1,800,000)
Balance per books, 9/30/20x1 P5,000,000
========
The bank statement for the month of October showed the following:
 Deposits ( including a P400,000 note collected for Miles ) P18,000,000
 Disbursements ( including P280,000 NSF check and P20,000
service charge ) 14,000,000
All reconciling items on September 30 cleared the bank in October 31. On
October 31, deposit in transit and outstanding checks are P2,000,000 and
1,200,000, respectively.

13. The cash balance per books on 10/31/20x1 is:

A.9,000,000 B. 10,700,000 C. 10,800,000 D. 11,100,000
14. The amount of cash receipts per books for October, 20x1 is:
A.17,200,000 B. 18,800,000 C. 19,200,000 D. 19,600,000
15. The amount of cash disbursements per books for October, 20x1 is:
A.13,100,000 B. 13,400,000 C. 13,700,000 D. 14,600,000

For questions 16 to 20
Nevada Company presented to you the following information regarding its Cash in
Bank account for the month of December, 20x1:
a. Balances per bank statements: November 30, P107,800, and December 31,
P115,200.
b. Balances of cash in bank account in company’s books: November 30, P82,725,
and December 31, P113,400.
c. Total receipts per books were P1,110,950 of which P6,050 was paid in cash to
a creditor on December 24.
d. Total charges in the bank statement during December were P1,094,850.
e. Undeposited receipts were: November 30, P45,300 and December 31,
P50,600.
f. Outstanding checks were: November 30, P13,375, and December 31, P9,650,
of which a check for P2,500 was certified by the bank on December 26.
g. NSF checks returned, recorded as reduction of cash receipts, were:
 Returned by bank on December, recorded also in December, P5,200.
 Returned by bank on December but recorded in January, P4,300
h. Collections by bank not recorded by company were P60,750 in November and
P58,200 in December.
i. Bank service charges not entered in company’s books were: November 30,
P3,750 and December 31, P2,100.
j. A check for P4,750 of Divina Company was charged to Nevada Company in
error.
k. A check drawn for P4,200 was erroneously entered in the books as P2,400.
16. How much is the adjusted cash balance as of November 30, 20x1?
A.107,800 B. 139,725 C. 75,875 D. 137,225
17. How much is the adjusted book receipts for December, 20x1?
A. 1,102,350 B. 1,113,600 C. 1,056,950 D. 1,108,400
18. How much is the adjusted book disbursements for December, 20x1?
A. 1,084,725 B. 1,078,675 C. 1,089,925 D. 1,084,725
19. How much is the adjusted cash balance as of December 31, 20x1?
A.158,650 B. 153,900 C. 165,200 D.163,400
20. How much is the cash shortage of December 31, 20x1?
A.1,800 B. 9,500 C. 4,750 D. 0