Question: While checking the cash account of ABC Company on December 31, 2013, the following information is discovered: -Free Course Hero Question Answer.

Question Description:

1.)   While checking the cash account of ABC Company on December 31, 2013, the following information is discovered:

Balance per book                                                                                                           6,776,000

Balance per bank statement (outstanding checks of P987,000)                  6,532,000

Deposit in bank closed by BSP                                                                                   1,600,000

Currency and coins counted                                                                                         950,000

Petty cash fund (of which P100,000 is in the form of paid vouchers)            50,000

Bank charges not yet taken up in the book                                                                6,000

Bond sinking fund                                                                                                           1,000,000

Receivables from employees                                                                                        70,000

Error in recording a check in the book. The correct

 amount as paid by the bank is P89,000 instead of P98,000

as recorded in the book, or a difference of                                                               9,000

What is the adjusted cash in bank on December 31,2013

a.       6,535,000

b.     6,779,000

c.      7,769,000

d.     8,379,000

Required.

a. Adjusting entries

B. bank reconciliation

C. compute for the amount of cash that should be reported in the financial statement

Free Course Hero Answer

Course Hero Answer & Explanation:

1. Adjusted Bank Balance

Balance per book                                                                                                       6,776,000

Bank charges not yet taken up in the book                                                             (  6,000)

Error in recording a check in the book. The correct

 amount as paid by the bank is P89,000 instead of P98,000

as recorded in the book, or a difference of                                                               9,000

Adjusted Bank balance. 6,779,000

Always remember that the adjusted bank and book balance is always the same.

A. Adjusting Entries

Bank Charge. 6,000

Cash 6,000

To record service charge

Cash. 9,000

Accounts Payable. 9,000

B. Bank Reconciliation

Adjusted Book Balance

Balance per book                                                                                                       6,776,000

Bank charges not yet taken up in the book                                                             (  6,000)

Error in recording a check in the book. The correct

 amount as paid by the bank is P89,000 instead of P98,000

as recorded in the book, or a difference of                                                               9,000

Adjusted Book balance. 6,779,000

C. Amount of Cash im financial statement

Cash in Bank. 6,779,000

Currency and coins counted                                                                                950,000

Petty cash fund (of which P100,000 is in the form of paid vouchers)            50,000 

Total cash.                                                      7,779,000

I hope this could help you. Thanks

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