In relation to your audit of the cash in bank of your client, MEG Company, the following information were gathered:As of May 31, 2016, the book balance is P20,000 and the bank balance is P18,000.The deposit in transit for May is P10,000; for June, P15,000.The outstanding checks for May amount to P2,000 and the outstanding checks for June total to P5,000.Credit memo for May pertain to a collection for a note totalling to P8,000; while for June, the credit memo is P30,000 pertaining to a bank loan.Debit memos total to P500 for May and P2,000 for June.A May book disbursement for P1,500 was not recorded. The correction was made in June.A June collection for P4,500 was not recorded. No correction was made.Bank errors for June are as follows: a deposit of P10,200 made by the entity was erroneously omitted; and a disbursement made by your client for P3,000 was erroneously debited to the account of MIG Company. No corrections were made during the month.June book debits – P150,000; June bank debits – P158,000; June cash balance per books (unadjusted) – P6,000; June bank credits – P161,300Requirements:Prepare a compound adjusting journal entry to correct the cash in bank balance as of June 30, 2016.

SOLUTION- ADJUSTING ENTRIES REFERS TO A SET OF JOURNAL ENTRIES RECORDED AT THE END OF THE…

Answered: In relation to your audit of the cash…

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter6: Bank Accounts, Cash Funds, And Internal Controls

Section: Chapter Questions

Problem 5PA

Related questions

Question

In relation to your audit of the cash in bank of your client, MEG Company, the following information were gathered:

As of May 31, 2016, the book balance is P20,000 and the bank balance is P18,000.
The deposit in transit for May is P10,000; for June, P15,000.
The outstanding checks for May amount to P2,000 and the outstanding checks for June total to P5,000.
Credit memo for May pertain to a collection for a note totalling to P8,000; while for June, the credit memo is P30,000 pertaining to a bank loan.
Debit memos total to P500 for May and P2,000 for June.
A May book disbursement for P1,500 was not recorded. The correction was made in June.
A June collection for P4,500 was not recorded. No correction was made.
Bank errors for June are as follows: a deposit of P10,200 made by the entity was erroneously omitted; and a disbursement made by your client for P3,000 was erroneously debited to the account of MIG Company. No corrections were made during the month.
June book debits – P150,000; June bank debits – P158,000; June cash balance per books (unadjusted) – P6,000; June bank credits – P161,300

Requirements: