Answered: Adjusted cash in bank balance, December…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following information was obtained in connection with the audit of Kathereen Hyacinth Co’s cash account as of December 31,2021:

·       Cash balance per general ledger on December 31 was P37,500. The company recorded actual company collections amounting to P152,500 from its customers during December. Also in December, the company recorded bank service charges of P2,500, including November bank service charges of P1,500. The December bank statement showed total deposits credited by the bank of P145,000 and total checks paid amounting to P133,750 and bank service charges of P3,250.

·       The Outstanding checks on November 30 and December 31 were P16,250 and P12,500 respectively while deposit in transit on November 30 was P12,500

·       The cash receipts book of December is under-footed by P2,500.

·       The bank erroneously charged the company’s account for a P3,750 check for another company. This bank error was corrected on January 2022.

Adjusted cash in bank balance, December 31,2021 and November 30, 2021

P26,500 and P18,500

P37,750 and P14,750

P37,500 and P12,250

P26,750 and P17,450

Definition Definition Financial journal in which only cash-related transactions are recorded. Cash transactions are posted chronologically in the cash book, which is also called a subsidiary book. All the cash receipts are recorded on the debit side and all the cash payments are recorded on the credit side. An important point to remember is that the cash book never shows a credit balance; only a debit balance is shown in the cash book.

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