PROBLEM NO.1 Information that might be useful in preparing a bank reconciliation is as follows below. The bank statement for the checking account of Monica & Chandler Co. showed a December 31, 2021, balance of P1,463,212. a) Outstanding checks were P132,025. b) The December 31, 2021, cash receipts of P57,500 were not deposited in the bank until January 2, 2022. c) One check written in payment of rent for P24,600 was correctly recorded by the bank but was recorded by M&C Co. as P26,400 disbursement. d) In accordance with prior authorization, the bank withdrew P45,000 directly from the checking account as payment on a mortgage note payable. The interest portion of that payment was P35,000. M&C Co. has made no entry to record the automatic payment. e) Bank service charges of P1,400 was listed on the bank statement. f) A deposit of P87,500 was recorded by the bank on December 13, but it did not belong to M&C Co. The deposit should have been made to the checking account of SUM, Inc. g) The bank statement included a charge of P8,500 for an NSF check. The check was returned with the bank statement and the company will seek payment from the customer. h) M&C Co. maintains a P20,000 petty cash fund that was appropriately reimbursed at the end of December. i) According to instruction for M&C Co. on December 30, the bank withdrew P1,000,000 from the account and purchased Treasury Bills for M&C Co.. M&C Co. recorded the transaction in its books on December 31 when it received notice from the bank. Half of the treasury bills mature in two months and the other half in six months. 1) What is the cash in bank balance per books on December 31, 2021? 2) What is the corrected cash in bank balance on December 31, 2021? 3) What amount of cash and cash equivalents should be reported in the current asset section of the balance sheet on December 31, 2021?
PROBLEM NO.1 Information that might be useful in preparing a bank reconciliation is as follows below. The bank statement for the checking account of Monica & Chandler Co. showed a December 31, 2021, balance of P1,463,212. a) Outstanding checks were P132,025. b) The December 31, 2021, cash receipts of P57,500 were not deposited in the bank until January 2, 2022. c) One check written in payment of rent for P24,600 was correctly recorded by the bank but was recorded by M&C Co. as P26,400 disbursement. d) In accordance with prior authorization, the bank withdrew P45,000 directly from the checking account as payment on a mortgage note payable. The interest portion of that payment was P35,000. M&C Co. has made no entry to record the automatic payment. e) Bank service charges of P1,400 was listed on the bank statement. f) A deposit of P87,500 was recorded by the bank on December 13, but it did not belong to M&C Co. The deposit should have been made to the checking account of SUM, Inc. g) The bank statement included a charge of P8,500 for an NSF check. The check was returned with the bank statement and the company will seek payment from the customer. h) M&C Co. maintains a P20,000 petty cash fund that was appropriately reimbursed at the end of December. i) According to instruction for M&C Co. on December 30, the bank withdrew P1,000,000 from the account and purchased Treasury Bills for M&C Co.. M&C Co. recorded the transaction in its books on December 31 when it received notice from the bank. Half of the treasury bills mature in two months and the other half in six months. 1) What is the cash in bank balance per books on December 31, 2021? 2) What is the corrected cash in bank balance on December 31, 2021? 3) What amount of cash and cash equivalents should be reported in the current asset section of the balance sheet on December 31, 2021?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:PROBLEM NO.1
Information that might be useful in preparing a bank reconciliation is as follows below.
The bank statement for the checking account of Monica & Chandler Co. showed a December 31, 2021, balance
of P1,463,212.
a) Outstanding checks were P132,025.
b) The December 31, 2021, cash receipts of P57,500 were not deposited in the bank until
January 2, 2022.
c) One check written in payment of rent for P24,600 was correctly recorded by the bank but
was recorded by M&C Co. as P26,400 disbursement.
d) In accordance with prior authorization, the bank withdrew P45,000 directly from the
checking account as payment on a mortgage note payable. The interest portion of that
payment was P35,000. M&C Co. has made no entry to record the automatic payment.
e) Bank service charges of P1,400 was listed on the bank statement.
f) A deposit of P87,500 was recorded by the bank on December 13, but it did not belong to
M&C Co. The deposit should have been made to the checking account of SUM, Inc.
g) The bank statement included a charge of P8,500 for an NSF check. The check was
returned with the bank statement and the company will seek payment from the customer.
h) M&C Co. maintains a P20,000 petty cash fund that was appropriately reimbursed at the end
of December.
i) According to instruction for M&C Co. on December 30, the bank withdrew P1,000,000 from
the account and purchased Treasury Bills for M&C Co. M&C Co. recorded the transaction in its
books on December 31 when it received notice from the bank. Half of the treasury bills
mature in two months and the other half in six months.
1) What is the cash in bank balance per books on December 31, 2021?
2) What is the corrected cash in bank balance on December 31, 2021?
3) What amount of cash and cash equivalents should be reported in the current asset section of the balance sheet on December 31, 2021?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education