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    The document provides 7 situations related to reconciling cash balances per bank statements and company books. It asks questions about determining the correct cash balance based on information given about deposits/collections not yet recorded, outstanding checks, bank charges, and errors.

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    The document provides 7 situations related to reconciling cash balances per bank statements and company books. It asks questions about determining the correct cash balance based on information given about deposits/collections not yet recorded, outstanding checks, bank charges, and errors.

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    The document provides 7 situations related to reconciling cash balances per bank statements and company books. It asks questions about determining the correct cash balance based on information given about deposits/collections not yet recorded, outstanding checks, bank charges, and errors.

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    The document provides 7 situations related to reconciling cash balances per bank statements and company books. It asks questions about determining the correct cash balance based on information given about deposits/collections not yet recorded, outstanding checks, bank charges, and errors.

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    Pamantasan ng Lungsod ng Marikina Auditing -Concepts & Application

    SSS Campus, Concepcion Dos, Marikina City Mr. Nilo N. Iglesias, CPA, MBA, REA

    Online Learning
    Audit of Cash & Cash Equivalents

    Presented below are the series of unrelated situations. Answer the question at the end of each
    situation.

    1. The accountant of Nancy Co. provided the following data in reconciling the April 30 cash in
    bank balance:

    Balance per bank, April 30 130,350


    Balance per books, April 30 85,000
    Bank service charge 2,000
    Deposit in transit 49,000
    Outstanding checks 17,650
    Note collected by bank including P 11,200 interest 136,000
    Check drawn by XYZ Co. erroneously charged to Nancy 54,600

    A transposition error was made in recording a sale and deposit in sales journal and
    cash receipts journal in April.
    Correct amount 13,658
    Recorded as 16,358

    What is the adjusted cash balance on April 30?

    2. The following information is included in Emil Company’s bank statement for the month of
    March:
    A customer’s check has been marked NSF by the bank & returned 13,000
    Bank service charge for March 1,200
    In comparing the bank statement to the company’s records, you found:
    Outstanding checks on March 31 184,000
    Deposit made but are not yet shown in the April bank statement 14,000

    The deposit in transit and outstanding checks have been correctly taken up in the company’s
    books. You also found a customer’s check for P 17,400 that had not yet been deposited and
    had not been recorded in Emil’s books. Your client’s books show a cash balance of P 36,420.

    What is Emil Company’s correct cash balance at March 31?

    3. The following information pertains to a checking account of a company at June 30, 2021.
    Balance per bank statement 200,000
    Interest earned for the second quarter 500
    Outstanding checks 15,000
    Customers’ checks returned for insufficient fund 5,000
    Deposit in transit 25,000

    What is the adjusted cash balance at June 30, 2021?


    4. A company is reconciling its bank statement with internal records. The cash balance per
    company’s books is P 45,000. There are P 5,000 of bank charges not yet recorded, P 7,500 of
    outstanding checks, P 12,500 of deposit in transit, and P 15,000 of bank credits and
    collections not yet taken up in the company’s books.

    What is the cash balance per bank?

    5. A company shows a cash balance of P 175,000 on its bank statement dated June 30. As of
    June 30, there are P 55,000 of outstanding checks and P 37,500 deposit in transit.

    What is the correct cash balance on the company’s books as of June 30?

    6. The cash account shows a balance of P 225,000 before reconciliation. The bank statement
    does not include a deposit of P 11,500 made on the last day of the month. The bank
    statement shows a collection by the bank of P 4,700 and a customer’s check for P 1,600 was
    returned because it was NSF. A customer’s check for P 2,250 was recorded on the books as P
    2,700 and a check written for P 395 was recorded as P 485.

    What should be the correct cash balance?

    7. On July 5, 2021, Emma Corp. received its bank statement for the month ending June 30. The
    statement showed a P 209,500 balance while cash account balance on June 30 was P 35,000.
    In reconciling the balances, the auditor discovered that:

    a) The June 30 collections of P 176,000 were recorded on the books but were not
    deposited until July.
    b) The bank service charges for the month of June totaled P 3,000
    c) A check paid for P 24,300 was entered incorrectly in the cash payments journal
    as P 34,200.

    What are the total outstanding checks on June 30, 2021?

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