APPLIED AUDITING Analyze and compute the appropriate answers for the following : (Provide the pertinent solutions to determine your correct answers. You have gathered the following data in the preparation of bank reconciliation on December 31, of the current year for AM Company: a. Balance per Bank Statement P 2,000,000 b. Balance per Book P 1,350,000 c. Bank service charge P 5,000 d. Outstanding checks P 300,000 e. Deposit in Transit P 237,500 f. Proceeds of bank loan, December 1, discounted 6 months at 12%, not recorded in AM Company’s books P 470,000 g. Customer’s NSF check charged back by bank P 25,000 h. Check of Rich Company charged by the bank against AM Company account P 75,000 i. Customer’s note collected by the bank in favor of AM Company Face Amount P 200,000 Interest 20,000 Total P 220,000 Less: Service Charge 2,500 Net Proceeds P 217,500 j. Deposit of P 50,000 incorrectly recorded by ban as P 5,000 k. Erroneous debit memo on December 28, to charge AM Company account with settlement of bank loan P 100,000 l. Deposit of Rich Company deposited to AM Company account P 150,000 REQUIRED : Prepare bank reconciliation as of December 31, the current year. Prepare the adjusting journal entries, except the amortization of discount on loans payable to the properly-recognized adjusted book balance
APPLIED AUDITING
Analyze and compute the appropriate answers for the following : (Provide the pertinent solutions to determine your correct answers.
- You have gathered the following data in the preparation of bank reconciliation on December 31, of the current year for AM Company:
|
a. Balance per Bank Statement |
P 2,000,000 |
|
b. Balance per Book |
P 1,350,000 |
|
c. Bank service charge |
P 5,000 |
|
d. Outstanding checks |
P 300,000 |
|
e. Deposit in Transit |
P 237,500 |
|
f. Proceeds of bank loan, December 1, discounted 6 months at 12%, not recorded in AM Company’s books |
P 470,000 |
|
g. Customer’s NSF check charged back by bank |
P 25,000 |
|
h. Check of Rich Company charged by the bank against AM Company account |
P 75,000 |
|
i. Customer’s note collected by the bank in favor of AM Company |
Face Amount P 200,000 Interest 20,000 Total P 220,000 Less: Service Charge 2,500 Net Proceeds P 217,500 |
|
j. Deposit of P 50,000 incorrectly recorded by ban as P 5,000 |
|
|
k. Erroneous debit memo on December 28, to charge AM Company account with settlement of bank loan |
P 100,000 |
|
l. Deposit of Rich Company deposited to AM Company account |
P 150,000 |
REQUIRED :
- Prepare bank reconciliation as of December 31, the current year.
- Prepare the
adjusting journal entries , except the amortization of discount on loans payable to the properly-recognized adjusted book balance
Step by step
Solved in 2 steps with 2 images
