Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Chapter 6, Problem 19P
1.
To determine
Prepare
2.
To determine
Record entries to adjust the current bank balance of Company T
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Students have asked these similar questions
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…
Problem Solving.
Required: 1. Prepare a properly classified bank reconciliation statement for each of the problems given below.2. Prepare the necessary adjusting journal entries on the company’s book for book reconciling items.
Use the following information for the next five questions.
Presented below are relevant extracts from TIYAGA Company's statement of financial
position as of December 31, 2023.
Cash and cash equivalents
Trade and other receivables
Inventories
Page 1 of 3- AUDITING AND ASSURANCE: CONCEPTS AND APPLICATIONS 1
●
●
During the course of your audit, you noted the following.
Cash and cash equivalents
The following were included in Cash and cash equivalents:
Customer's check for P100,000 returned by bank on December 29, 2023 due to
insufficient fund but subsequently redeposited and cleared by the bank on
January 3, 2024.
Customer's check for P200,000 dated January 2, 2024, received on December 29,
2023.
Cash earmarked for bonds payable due on June 30, 2024, P5,000,000.
P1,000,000 of compensating balance against short-term borrowing arrangement
at December 31, 2023. The compensating balance is legally restricted as to
withdrawal.
●
Check written and dated December 29, 2023 and delivered to payee…
Chapter 6 Solutions
Intermediate Accounting: Reporting And Analysis
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Ch. 6 - Discuss the differences between the allowance...Ch. 6 - Prob. 12GICh. 6 - Prob. 13GICh. 6 - What method of bad debt estimation categorizes...Ch. 6 - Why does the write-off of uncollectible accounts...Ch. 6 - Discuss the difference between a secured borrowing...Ch. 6 - When does a company record the transfer of...Ch. 6 - Prob. 18GICh. 6 - What is a non-interest-bearing note? How does...Ch. 6 - Prob. 20GICh. 6 - How are the cash proceeds determined when a note...Ch. 6 - Under IFRS, what criteria must be satisfied in...Ch. 6 - Prob. 23GICh. 6 - (Appendix 6. 1) What is the purpose of a petty...Ch. 6 - (Appendix 6. 7) Why are actual expenses, rather...Ch. 6 - Prob. 26GICh. 6 - Prob. 27GICh. 6 - Prob. 1MCCh. 6 - Greenfield Company had the following cash balances...Ch. 6 - A company is in its first year of operations and...Ch. 6 - Marmol Corporation uses the allowance method for...Ch. 6 - On January 1, 2019, King Companys Allowance for...Ch. 6 - Prior to adjustments, Barrett Companys account...Ch. 6 - A method of estimating bad debts that focuses on...Ch. 6 - When the accounts receivable of a company are sold...Ch. 6 - Prob. 9MCCh. 6 - Prob. 10MCCh. 6 - Prob. 11MCCh. 6 - On December 31, Harrison Company reports the...Ch. 6 - Lindley Enterprises sells hand woven rugs. Paige...Ch. 6 - Long Corporation is a fabric manufacturing...Ch. 6 - Refer to RE6-3. Assume Long records accounts...Ch. 6 - Longmire Sons nude sales un credit to Alderman...Ch. 6 - Refer to RE6-5. Assume Longmire uses a perpetual...Ch. 6 - McKinney Co. estimates its uncollectible accounts...Ch. 6 - Refer to RE6-7. At the end of the first quarter of...Ch. 6 - Refer to RE6-8. On April 23, 2020, McKinncy Co....Ch. 6 - On December 1 of the current year, Jordan Inc....Ch. 6 - On December 1 of the current year, Jordan Inc....Ch. 6 - On December 1, Newton Enterprises sells 100,000 of...Ch. 6 - Kaseys Cake Shop made 20,000 in sales of wedding...Ch. 6 - On June 1, Phillips Corporation sold, with...Ch. 6 - Prob. 15RECh. 6 - Prob. 16RECh. 6 - Computing; the Cash Balance Listed below are ten...Ch. 6 - Prob. 2ECh. 6 - Journal Entry to Separate Receivables An...Ch. 6 - Prob. 4ECh. 6 - Prob. 5ECh. 6 - Prob. 6ECh. 6 - Accounts Receivable Calculations The following...Ch. 6 - Estimation versus Direct Write-Off of Bad Debts...Ch. 6 - Estimating Bad Debts from Receivables Balances The...Ch. 6 - Aging Analysis of Accounts Receivable Cowens, a...Ch. 6 - Comparison of Bad Debt Estimation Methods Bradford...Ch. 6 - Inferring Accounts Receivable Amounts At the end...Ch. 6 - ReceivablesBad Debts At January 1, 2019, the...Ch. 6 - Transferring Accounts Receivable White Corporation...Ch. 6 - Transfer of Accounts Receivable Inder Corporation...Ch. 6 - Generating Cash from Receivables Guide Company...Ch. 6 - Interest-Bearing and Non-Interest-Bearing Notes On...Ch. 6 - Computing the Proceeds from the Sale of Notes...Ch. 6 - Recording the Sale of Notes Receivable Singer...Ch. 6 - Prob. 20ECh. 6 - Prob. 21ECh. 6 - Prob. 22ECh. 6 - Prob. 23ECh. 6 - Prob. 24ECh. 6 - Prob. 1PCh. 6 - Prob. 2PCh. 6 - Estimating Bad Debts Keegan Corporations...Ch. 6 - Allowance for Bad Accounts Installment Jewelry...Ch. 6 - Allowance for Doubtful Accounts From inception of...Ch. 6 - Prob. 6PCh. 6 - Aging Accounts Receivable On September 30. 2019...Ch. 6 - Prob. 8PCh. 6 - Prob. 9PCh. 6 - Prob. 10PCh. 6 - Factoring and Assignment of Accounts Receivable...Ch. 6 - Recording Note Transactions The following...Ch. 6 - Notes Receivable Transactions The following notes...Ch. 6 - Analyzing Accounts Receivable Upham Companys June...Ch. 6 - Comprehensive Receivables Problem Blackmon...Ch. 6 - Prob. 16PCh. 6 - Unknown Book Balance (Appendix 6.1) The following...Ch. 6 - Prob. 18PCh. 6 - Prob. 19PCh. 6 - Prob. 1CCh. 6 - Prob. 2CCh. 6 - Bad Debt Expense When a company has a policy of...Ch. 6 - Prob. 4CCh. 6 - Receivables Issues Magrath Company has an...Ch. 6 - Components of Cash Cash is an important asset of a...Ch. 6 - Prob. 7CCh. 6 - Transfer of Accounts and Notes Receivable Tidal...Ch. 6 - Ethics and Sales Returns At the end of 2019, the...Ch. 6 - Analyzing Starbuckss Cash and Receivables...Ch. 6 - Researching GAAP Situation Hamilton Company...
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Similar questions
- Complex Balance Sheet Presented below is the unaudited balance sheet as of December 31, 2019, prepared by Zeus Manufacturing Corporations bookkeeper. Your company has been engaged to perform an audit, during which you discover the following information: 1. Checks totaling 14,000 in payment of accounts payable were mailed on December 31, 2019, but were not recorded until 2020. Late in December 2019, the bank returned a customers 2,000 check marked NSF, but no entry was made. Cash includes 100,000 restricted for building purposes. 2. Included in accounts receivable is a 30,000 note due on December 31, 2022, from Zeuss president. 3. During 2019, Zeus purchased 500 shares of common stock of a major corporation that supplies Zeus with raw materials. Total cost of this stock was 51,300, and fair value on December 31, 2019, was 51,300. Zeus plans to hold these shares indefinitely. 4. Treasury stock was recorded at cost when Zeus purchased 200 of its own shares for 32 per share in May 2019. This amount is included in investments. 5. On December 31, 2019, Zeus borrowed 500,000 from a bank in exchange for a 10% note payable, manning December 31, 2024. Equal principal payments are due December 31 of each year beginning in 2020. This note is collateralized by a 250,000 tract of land acquired as a potential future building site, which is included in land. 6. The mortgage payable requires 50,000 principal payments, plus interest, at the end of each month. Payments were made on January 31 and February 28, 2020. The balance of this mortgage was due June 30, 2020. On March 1, 2020, prior to issuance of the audited financial statements, Zeus consummated a non-cancelable agreement with the lender to refinance this mortgage. The new terms require 100,000 annual principal payments, plus interest, on February 28 of each year, beginning in 2021. The final payment is due February 28, 2028. 7. The lawsuit liability will be paid in 2020. 8. Of the total deferred tax liability; 5,000 is considered a current liability. 9. The current income tax expense reported in Zeuss 2019 income statement was 61,200. 10. The company was authorized to issue 100,000 shares of 50 par value common stock.arrow_forwardAssume 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. $39,100,000arrow_forwardIn connection with your audit of the Cash account of Bruhilda Co., you obtained the followinginformation. You are to prepare the following:1. A four-column reconciliation that would end at adjusted balances.2. Adjusting journal entries as of December 31, 2021.Reconciling items: November 30 December 31Deposits in transit P10,400 ?Outstanding checks 16,014 ?NSF checks 1,052 P1,400Customers’ notes collected by bank 3,000 8,554Bank service charges 100 130Erroneous bank debits 1,200 1,800Erroneous bank credits 2,000 6,000Book balances ? 332,472Bank balances 261,120 ?December transactions: Books BankReceipts P302,460 P299,902Disbursements 222,846 220,196arrow_forward
- 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…arrow_forwardIn reconciling a bank statement, when a check from the previous month appears on the bank statement (but not the cash balance due to timing), how would you state it on the reconciliation? The note that was given: The difference in the beginning balances in the company’s records and the bank statement relates to checks #469 and #470, which are outstanding as of April 30, 2021 (prior month). Attached is an image of my current progress.arrow_forwardRequired: 1.Complete the bank reconciliation at December 31, 2019. 2. Prepare the adjusting journal entries required to make the Cash in Bank account in the general ledger agree with the adjusted cash balance on the December 31 bank reconciliation. Include descriptions. Please show work.arrow_forward
- 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…arrow_forwardIn 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.arrow_forwardRequired: A. Prepare a working paper comparing (1) the total of all checks returned by the bank or still outstanding with (2) the total per clients records of checks outstanding at December 31 plus checks issued from January 1-14. B. Suggest a four possible explanations for the situation disclosed in the working paper. State what action you would take in each case, including any adjustments entry would you propose.arrow_forward
- 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…arrow_forwardWhich of the following procedures would an auditor most likely perform in searching for unrecorded liabilities? *A. Scan the cash disbursements entries recorded just before year end for indications of unusual transactions.B. Compare a sample of purchase orders issued just after year end with the year-end accounts payable trial balance.C. Obtain a copy of the receiving report until year end and its related sales invoice and trace them to the purchases journal.D. Compare the entries recorded in the purchases journal and the cash disbursements journal just before year end.arrow_forwardThe bank reconciliation for ABC Inc. at its year-end, December 31, 2022 includes the following: Outstanding checks $761,342.55. Identify all the following procedures that are applicable to the audit of outstanding checks. Check All That Apply Inspect bank credit memos Trace items on the bank reconciliation to the cutoff bank statement. Trace items to cash receipts journal Ascertain reason for unusual delay, if any. Trace items to cash disbursements journal. Inspect bank debit memos.arrow_forward
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