Assignment 3 ACFAR 1231 Proof of Cash

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ACFAR 1231

Assignment 3 – Proof of Cash

Problem 1:

Tiny Company prepared the following bank reconciliation on October 31:

Cash account balance 990,000


Less: Bank service charge 5,000
Deposit outstanding 45,000
Check erroneously charged by
Bank against entity’s account 10,000 60,000
Balance 930,000
Add: Checks outstanding 125,000
Unrecorded collections 45,000 170,000
Bank statement balance 1,100,000

October 31 balance per book 990,000


Book credits 1,220,000
Book debits 710,000

October 31 balance per bank statement 1,100,000


Back credits 500,000
Bank debits 1,000,000

Debit memo for service charge in November 10,000


Debit memo for customer’s NSF check in November 50,000

During the month of November, the bank corrected the P100,000 error committed in prior month.

The entity recorded as cash receipts a customer note receivable of P100,000 placed with the bank for
collection on November 30. The note was not collected until the subsequent month.

Required:

a. Prepare bank reconciliation statement on November 30 showing adjusted balances.


b. Prepare one adjusting entry only on November 30.
Problem 2

Mixy Company provided the following data concerning the cash records for the month of September
and October.

September 30 October 31
Book balance 1,900,000 ?
Total cash receipts per book 1,400,000
Total cash disbursement per book 2,400,000

Bank balance 2,100,000 ?


Total charges in bank statement 2,500,000
Total credits in bank statement 1,200,000

NSF check 60,000 40,000


Collections of accounts receivable
Not recorded by entity and corrected in
Subsequent month 30,000 50,000
Overstatement of check in
Payment of salaries corrected
In subsequent month 90,000 120,000
Deposit in transit 130,000 260,000
Outstanding checks 270,000 30,000

Required:

a. Prepare a four – column reconciliation showing adjusted balances.


b. Prepare adjusting entries on October 31.

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