auditing RRR Services Inc
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- MC50 The following bank reconciliation is presented for the Pony Co. for the month of November, 2020: Balance per bank statement, 11/30/2020 P180,400 Add: Deposit in transit P41,500 Erroneous bank charge 15,500 56,500 Subtotal P236,900 Less: Outstanding Checks 78,200 Balance per books, 11/30/2020 P158,700 Data for the month of December 2020 follow: Per bank: December deposits/credits — P261,000 December charges/debits — P224,200 Balance, December 31, 2020 — P217,200 All items that were outstanding as of November 30 cleared through the bank in December, including the bank charge. In addition, P25,000 checks were outstanding as of December 31, 2020. What is the amount of cash receipts per books in December 2020? (WITH SOLUTION) a. P204,500 b. P219,500 c. P246,000 d. P317,500INTRODUCTION Bryce Commings was assistant controller for Waterton Company, and his responsibilities included bank relations, accounts receivable collection, and cash management. From his business readings he was aware that many wall street economists were forecasting a recession for late 2019 into middle 2020. He remembered that in the last recession Waterton was criticized for weakened liquidity as shown on its balance sheet. He ran a simulation with improved accounts receivable and inventory turnovers, Bryce was disappointed with the overall liquidity picture. He was concerned that he was missing something. Maybe he did not understand the relationships among the liquidity measures or maybe he had an error in his worksheet or maybe financial relationships had changed in the past ten years. He assumed if cash came in faster with better collections and more efficient inventory control, liquidity metrics would improve. The eight conventional liquidity measures were current ratio,…Please do not reject :(( Please, explain first how you solve it. Thank you. Cash Shortage F COMPANY, organized on March 1, 2021, has a very poor internal control system. Thecompany's cashier is also its accountant. After 9 months of operations, the company's managersuspects that the cashier-accountant has been misappropriating company collections. You havebeen engaged to audit the company's accounts to determine the extent of fraud, if any. You started the audit on November 15. On that date, the cash on hand per your surprise countwas P5,140. Also on that date, the bank confirmed that the balance of the company's currentaccount was P26,328. Your examination of the records reveals that a check for P1,852 wasoutstanding on November 15. The company's markup is 40% of sales. Further examination of the company's records reveals the following balances at November 15,2021:
- 32.At the end of the accounting period, the petty cash fund/drawer showed petty cash vouchers for expenses paid from the fund that have not been reimbursed. If no adjusting entry is made at year end, a. cash will be understated and expenses will be overstated. b. cash will be overstated and expenses will be understated c. cash and net income will be understated. d. cash and expenses will be overstated.Blue Company's bank reconciliation for January 31, 2020 does not balance. Cash balance per bank $5,300 Add: NSF check 1,490 Less: Bank service charge 25 Adjusted balance per bank $6,765 Cash balance per books $5,905 Less: Deposits in transit 950 Add: Outstanding checks 1,860 Adjusted balance per books $6,815 (a) Prepare a correct bank reconciliation. (List items that increase cash balance first.) BLUE COMPANYBank Reconciliation For the Month Ended January 31, 2020January 31, 2020For the Year Ended January 31, 2020 Cash balance per bank statementDeposits in transitBank service chargeNSF checkOutstanding checksAdjusted cash balance per bank $ LessAdd:…I NEED HELP WITH THIS WORD PROBLEM A new accountant at Coronado Inc. is trying to identify which of the amounts shown below should be reported as the current asset “Cash and cash equivalents” in the year-end balance sheet, as of April 30, 2020. 1. $75 of currency and coin in a locked box used for incidental cash transactions. 2. A $12,800 U.S. Treasury bill, due May 31, 2020. 3. $210 of April-dated checks that Wyne has received from customers but not yet deposited. 4. An $93 check received from a customer in payment of its April account, but postdated to May 1. 5. $2,700 in the company’s checking account. 6. $5,400 in its savings account. 7. $83 of prepaid postage in its postage meter. 8. A $38 IOU from the company receptionist. (a)What balance should Coronado report as its “Cash and cash equivalents” balance at April 30, 2020? CASH AND CASH EQUIVALENTS BALANCE $________
- Bank Reconciliation. Dick Marshall has just received the monthly bank statement at May 31 from City National Bank. The statement shows an ending balance of $5,500.00. Listed on the statement is EFT rent collection of $800.00, service charge of $24.00, NFS checks for $148.00 and $18.00 charge for printed checks. In reviewing his cash records, he identified outstanding checks totaling $934.00and April deposit in transit of $3,576.00. During May he recorded a $653.00 check for the salary of a part time employee by debiting Salary expense and crediting cash for $131.00. The cash account shows a May balance of $8,054.00. Required: Prepare the Bank Reconciliation at May 31. Make the necessary journal entries that Marshall should record on May 31.Notes Receivable Bork Furniture Company received a 120-day, 6% note for $80,000 dated April 20 from Valley Designs to replace an account receivable. If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts. a. Illustrate the effects of accepting the note from Valley Designs on the accounts and financial statements of Bork Furniture Company. Financial Statement Effects Balance Sheet Assets = Liabilities + Stockholders' Equity + = + Apr. 20. fill in the blank 5 fill in the blank 6 fill in the blank 7 fill in the blank 8 Statement of Cash Flows Income Statement fill in the blank 10 fill in the blank 12 b. Determine the due date of the note. c. Determine the maturity value of the note. To simplify, use 360 days per year to compute interest.$fill in the blank 14…MC29 The following pertains to Onyx Trading on April 30, 2020: Correct cash balance in a general checking account with Equitable-PCIBank — P320,000 Overdraft in a special checking account with Family Bank (Onyx does not have another account with Family Bank) — P20,000 Cash accumulated in a special fund that will be used for plant expansion in five years — P150,000 Cash surrender value of life insurance policy — P 32,000 Cash travel advances in the hands of sales personnel — P12,000 Currency and coins in a petty cash fund (the company has not replenished the fund to the imprest amount of P2,000) — P580 How much cash should Onyx report on the April 30, 2020 statement of financial position? (WITH SOLUTION) a. P332,580 b. P322,000 c. P320,580 d. P302,000
- 7. The money creation processSuppose First Main Street Bank, Second Republic Bank, and Third Fidelity Bank all have zero excess reserves. The required reserve ratio is 25%. Brian, a client of First Main Street Bank, deposits $1,800,000 into his checking account at First Main Street Bank.Complete the following table to reflect any changes in First Main Street Bank's T-account (before the bank makes any new loans).AssetsLiabilities Complete the following table to show the effect of a new deposit on excess and required reserves when the required reserve ratio is 25%.Hint: If the change is negative, be sure to enter the value as negative number.Amount DepositedChange in Excess ReservesChange in Required Reserves(Dollars)(Dollars)(Dollars)1,800,000 Now, suppose First Main Street Bank loans out all of its new excess reserves to Alyssa, who immediately uses the funds to write a check to Tim. Tim deposits the funds immediately into his checking account at Second Republic Bank. Then Second…Asap The cash account shows a balance of P450,000 before bank reconciliation. The bank statement does not include a deposit of P23,000 made on the last day of the month. The bank statement shows a collection by the bank of P9,400 and a customer's check for P3,200 was returned because it was NSF. A customer's check for P4,500 was recorded on the books at P5,400, and a check written for P790 was recorded as P970. The correct balance in the cash account was?