REQUIRED: Prepare a proof of cash using book to bank method Problem:You obtained the following information in connection with the audit of Bonsoir Company cash account as ofDecember 31, 20x1:Outstanding checks, 11/30/20x1P 16,250Outstanding checks, 12/31/20x112,500Deposit in transit, 11/30/20x112,500Cash balance per general ledger, 12/31/20xl37,500Actual company collections from its customers duringDecember152,500Company checks paid by bank in DecemberBank service charges recorded on the company books130,000in December2,500Bank service charges per December bank statement3,250Deposits credited by bank during DecemberNovember bank service charges recorded on company145,000books in December1,500The cash receipts book of December is underfooted by P 2,500.The bank erroneously charged the company's account for a P3,750 check of another depositor. This bank errorwas corrected in January 20x2.

Proof of cash is statement which is prepared to reconcile the bank balance as per books and as per…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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REQUIRED: Prepare a proof of cash using book to bank method

Problem:
You obtained the following information in connection with the audit of Bonsoir Company cash account as of
December 31, 20x1:
Outstanding checks, 11/30/20x1
P 16,250
Outstanding checks, 12/31/20x1
12,500
Deposit in transit, 11/30/20x1
12,500
Cash balance per general ledger, 12/31/20xl
37,500
Actual company collections from its customers during
December
152,500
Company checks paid by bank in December
Bank service charges recorded on the company books
130,000
in December
2,500
Bank service charges per December bank statement
3,250
Deposits credited by bank during December
November bank service charges recorded on company
145,000
books in December
1,500
The cash receipts book of December is underfooted by P 2,500.
The bank erroneously charged the company's account for a P3,750 check of another depositor. This bank error
was corrected in January 20x2.

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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