required:1. Compute for the deposits in transit as of December 31, 2018. 2. Compute for the outstanding checks as of December 31, 2018. 3.Prepare a compound adjusting journal entry to reflect the correct/adjustedcash in bank balance as of December 31, 2018. You were able to obtain the following information from your client, YZ Corporation and the bank statementsfor November 30 and December 31, 2018. As the auditor, you were also able to directly secure thestatements of January 12, 2019 and acquired the necessary confirmation.11/30/1812/31/18275,020Balance, bank statement344,420Balance, company recordsDeposits in transitOutstanding checks271,260226,01053,000?88,42012/1-31/18 1/1-12/19292,500Receipts, cash recordsCredits, bank statement963,230941,010321,490Disbursements, cash recordCharges, bank statement1,008,480177,5701,010,410230,180The following information also was obtained:a) Check No. 804 for P340 cleared by the bank in December as P1,340. This was found in proving the bankstatement. The bank made the correction on January 8, 2019.b) A note of P20,000, sent to the bank for collection on November 15, 2018, was collected and creditedto the account on November 28, 2018, net of a collection fee of P80. The note was recorded in thecash receipts on December 21, 2018, at which date the collection fee was entered as a disbursement.c) The client records returned checks in red in the cash receipts journal. The checks listed in the tablewere returned by the bank.Returned Recorded Redeposited12/5/18AmountCompany ACompany BP3,2706,730 12/27/18No entry12/8/181/15/191/3/19d) Two payroll checks for employee's vacations totaling P5,500 were drawn on January 3, 2019, andcleared the bank on January 8, 2019. These checks were not entered in the clients records becausesemi-monthly payroll summaries are entered only on the 15th and the last day of each month.

Journal entry is the practice of recording commercial transactions for the first time in the books…

required: 1. Compute for the deposits in transit as of December 31, 2018. 2. Compute for the outstanding checks as of December 31, 2018. 3.Prepare a compound adjusting journal entry to reflect the correct/adjusted cash in bank balance as of December 31, 2018.

required: 1. Compute for the deposits in transit as of December 31, 2018. 2. Compute for the outstanding checks as of December 31, 2018. 3.Prepare a compound adjusting journal entry to reflect the correct/adjusted cash in bank balance as of December 31, 2018.

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter10: Auditing Cash, Marketable Securities, And Complex Financial Instruments

Section: Chapter Questions

Problem 32CYBK

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1. In auditing the Maranao Company, you obtain directly from the bank, with which it does business, the bank statement, canceled checks, and other memoranda which relate to the company's bank account, for December 2021. In reconciling the bank balance at December 31, 2021 with that shown on the company's book, you observe the facts set forth below: Balance per bank statement, 12/31/21 Balance per book, 12/31/2021 Outstanding checks, 12/31/21 Receipts of 12/31/21 deposited 1/02/2022 Service Charge for Nov. 2021 per Bank Memo of 12/15/21 Proceeds of Bank Loan, 12/15/21, discounted for 3 months at 25% per annum, omitted from company's books Deposit of 12/23/21 omitted from Bank Statement Check of Tote's Products Co., charged back on 12/22/21 of absence of 88,219.12 58,983.46 32,108.42 4 5,317.20 3.85 9,875.00 7 2,892.41 counter-signature and redeposited with complete signature on 8 01/5/22,; no entry on the books having been made for the charge back or the redeposit 417.50 Error on Bank…
The auditor has gathered the following information to test the accuracy of the one prepared by the controller. In particular, the auditor is testing the accuracy of the outstanding cheques. Use the following information to prepare the bank reconciliation and calculate what the total of the outstanding cheques should be. 1. Cash balance - March 31 $39,500 2. Outstanding Deposits $13,810 3. NSF cheque from a customer $750 4. Bank Statement Balance - March 31 $127,100 5. The bank recorded a deposit as $10,000 when the deposit was actually $1,000 6. The bank credited the company's bank account with $3,900 of interest earned 7. The bank statement showed an EFT from a customer for $16,300 8. The bank charged a service charge of $45 9. The company posted cheque #1730 as $890 when the actual amount was properly debited by the bank for $980 a) Outstanding Cheques= $73,095 b) Outstanding Cheques= $76,995 c) Outstanding Cheques=$82,095 d) Outstanding Cheques= $56,795
In auditing Backstraight Boyz Corporation, you obtained the bank statement, cancelled checks, and other memoranda which relate to the company’s bank account for December 2021. In reconciling the bank balance with that shown on the company’s books, you observed the facts set forth below: Balance per bank statement, Dec. 31, 2021 P 47,174 Balance per books, Dec. 31, 2021 19,289 Outstanding checks, Dec. 31, 2021 63,000 Receipts of Dec. 31, 2021, deposited Jan. 2, 2022 6,260 Service charge for November, per bank 1,000memo of Dec. 15, 2021 Proceeds of bank loan, Dec. 15, 2021, discounted for 3 months at 18% per annum, omitted fromcompany books 47,750 Deposit of Dec. 22, 2021, omitted from bank statement…
Assume that you have audited accounts receivable as of 12/31/2020 and are confident that the ending balance should be $7,188,000. Further, you know that the audited balance as of 12/31/2019 was $8,462,000. You also verified cash deposits from customers through a review of the bank account. Based on that review you believe that cash receipts from customers ranges from an amount of $40,000,000 to $41,000,000. Which amount below would represent an overstatement of revenue for the year ending 12/31/2020, based on the facts above? 1. $38,500,000 2. $41,000,000 3. $39,762,000 4. $39,100,000
A1) Which of the following would the auditor most likely perform when auditing the bank reconciliation for a December 31 year-end audit? a. Confirm the audit client’s book balance shown on the bank reconciliation directly with the bank. b. Verify the audit client’s book balance shown on the bank reconciliation to the Cash balance in the audit client’s trial balance and general ledger. c. Subtract the outstanding check amounts from the audit client’s book balance. d. Verify the deposits in transit amounts to the audit client’s December bank statement.
In the audit of a client with a fiscal year ending December 31, the CPAs obtain a January 10 bank statement directly from the bank. Explain how this cutoff bank statement will be used a. In the review of the December 31 bank reconciliation.b. To obtain other audit information.
In the course of your audit of the financial statements of Apayao Corp. for the period ended December 31, 2021, you gathered the following information regarding the entitiy's current account in BPI: • Balances taken from the company's general ledger: Cash balance, November 30, 2021 P629,860 Cash balance, December 31, 2021 576,420 Receipts, December 1 31, 2021 306,220 o Balances taken from the December bank statement: Bank balance, November 30, 2021 P685,180 Bank balance, December 31, 2021 637,220 Disbursements (debit) 356,080 Outstanding checks, November 30, 2021 (P26,140 was paid by the bank in December), P72,140. o Deposit in transit, November 30, 2021, P15,260. o A bank credit memo was issued in December to correct an erroneous charge made in November, P1,500. o Note collected by bank in December (company was not informed of the collection), P2,060. • A check for P2,020 (payable to a supplier) was recorded in the Check Register in December as P3,000. • A check for P2,240 was charged…
Accompanying the bank statement was a debit memorandum for an NSF check received from a customer. This item would be included on the bank reconciliation as a(n) ____.
In the course of your audit of the financial statements of Apayao Corp. for the period ended December 31, 2021, you gathered the following information regarding the entitiy’s current account in BPI: Balances taken from the company’s general ledger: Cash balance, November 30, 2021 P629,860 Cash balance, December 31, 2021 576,420 Receipts, December 1 – 31, 2021 306,220 Balances taken from the December bank statement: Bank balance, November 30, 2021 P685,180 Bank balance, December 31, 2021 637,220 Disbursements (debit) 356,080 Outstanding checks, November 30, 2021 (P26,140 was paid by the bank in December), P72,140. Deposit in transit, November 30, 2021, P15,260. A bank credit memo was issued in December to correct an erroneous charge made in November, P1,500. Note collected by bank in December (company was not informed of the collection), P2,060. A check for P2,020 (payable to a supplier) was recorded in the Check Register in…
In the course of your audit of the financial statements of Apayao Corp. for the period ended December 31, 2021, you gathered the following information regarding the entitiy’s current account in BPI: Balances taken from the company’s general ledger: Cash balance, November 30, 2021 P629,860 Cash balance, December 31, 2021 576,420 Receipts, December 1 – 31, 2021 306,220 Balances taken from the December bank statement: Bank balance, November 30, 2021 P685,180 Bank balance, December 31, 2021 637,220 Disbursements (debit) 356,080 Outstanding checks, November 30, 2021 (P26,140 was paid by the bank in December), P72,140. Deposit in transit, November 30, 2021, P15,260. A bank credit memo was issued in December to correct an erroneous charge made in November, P1,500. Note collected by bank in December (company was not informed of the collection), P2,060. A check for P2,020 (payable to a supplier) was recorded in the Check Register in…
In the course of your audit of the financial statements of Apayao Corp. for the period ended December 31, 2021, you gathered the following information regarding the entitiy’s current account in BPI: Balances taken from the company’s general ledger: Cash balance, November 30, 2021 P629,860 Cash balance, December 31, 2021 576,420 Receipts, December 1 – 31, 2021 306,220 Balances taken from the December bank statement: Bank balance, November 30, 2021 P685,180 Bank balance, December 31, 2021 637,220 Disbursements (debit) 356,080 Outstanding checks, November 30, 2021 (P26,140 was paid by the bank in December), P72,140. Deposit in transit, November 30, 2021, P15,260. A bank credit memo was issued in December to correct an erroneous charge made in November, P1,500. Note collected by bank in December (company was not informed of the collection), P2,060. A check for P2,020 (payable to a supplier) was recorded in the Check Register in…
You were able to gather the following from the December 31, 2020 trial balance of Should Corporationin connection with your audit of the company:Cash on hand372.000Petty cash fundBPI current accountSecurity Bank current account No. 01Security Bank current account No. 02PB savings accountPB time deposit10,000950.0001.280.000(40,000)500.000300.000Cash on hand includes the following items:a. Customer's check for P60,000 returned by bank on December 26, 2020 due to insufficient fundbut subsequently redeposited and cleared by the bank on January 8, 2021.b. Customer's check for P30,000 dated January 2. 2021, received on December 29. 2020.c. Postal money orders received from customers, P36,000.The petty cash fund consisted of the following items as of December 31, 2020.Currency and coinsEmployees' valesCurrency in an envelope marked "collections for charity" with namesP 2.1001.600attachedUnreplenished petty cash vouchersCheck drawn by Should Corporation, payable to the petty…