he “Cash” account in the ledger of a company on December 31, 2017 had a balance of P1,750,000. A review of the account however disclosed the following: 1. The sales book was left open up to January 10, 2018 and cash sales totalling P18,200 were considered as cash sales in 2017. 2. Checks of P9,300 in payment of utilities were prepared before December 31, 2017 and recorded in the books on the same date, but mailed or delivered only on January 5, 2018. 3. Checks with January, 2018 dates totalling P 17,800 are being held by the cashier and were included as part of cash on December 31, 2017. The company’s experience shows that postdated checks are eventually realized. 4. Customer’s check for P11,500 deposited with the bank on December 15, 2017 was returned on December 18, 2017. The return was not recorded in the books. 5. The cash account includes P 230,000 set aside for payment of dividends. 6. The cash account includes a check received from a customer in May, 2017 for P3,500, which the company failed to deposit. Verification from the customer reveals that the amount will eventually be realized. 7. The cash account includes change fund amounting to P 5000. When the fund was counted, only P 4,450 was found. 8. The cash account includes P400,000 fund for payroll. 9. The cash account includes petty cash fund amounting to P 20,000. The fund was last replenished on December 24, 2017. When the fund was counted on January 3, 2018, the following were found: Bills and coins P 13,000 Vouchers with December, 2017 dates 5,500 Vouchers with January, 2018 dates 1,300 10. An examination of the company’s sales invoice revealed that P3,500 check was received on December 30, 2017 from sale of scrap materials. The amount cannot be traced from the cash receipts book but was verified to have been deposited to the bank. Required: What is the correct amount of cash to be presented on December 31, 2017 balance sheet?
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
The “Cash” account in the ledger of a company on December 31, 2017 had a balance of P1,750,000. A review of the account however disclosed the following:
1. The sales book was left open up to January 10, 2018 and cash sales totalling P18,200 were considered as cash sales in 2017.
2. Checks of P9,300 in payment of utilities were prepared before December 31, 2017 and recorded in the books on the same date, but mailed or delivered only on January 5, 2018.
3. Checks with January, 2018 dates totalling P 17,800 are being held by the cashier and were included as part of cash on December 31, 2017. The company’s experience shows that postdated checks are eventually realized.
4. Customer’s check for P11,500 deposited with the bank on December 15, 2017 was returned on December 18, 2017. The return was not recorded in the books.
5. The cash account includes P 230,000 set aside for payment of dividends.
6. The cash account includes a check received from a customer in May, 2017 for P3,500, which the company failed to deposit. Verification from the customer reveals that the amount will eventually be realized.
7. The cash account includes change fund amounting to P 5000. When the fund was counted, only P 4,450 was found.
8. The cash account includes P400,000 fund for payroll.
9. The cash account includes petty cash fund amounting to P 20,000. The fund was last replenished on December 24, 2017. When the fund was counted on January 3, 2018, the following were found:
Bills and coins
P 13,000
Vouchers with December, 2017 dates
5,500
Vouchers with January, 2018 dates
1,300
10. An examination of the company’s sales invoice revealed that P3,500 check was received on December 30, 2017 from sale of scrap materials. The amount cannot be traced from the
Required:
What is the correct amount of cash to be presented on December 31, 2017
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