The books of Cajardo Service, Inc. disclosed a cash balance of P687,570 on December 31, 2010.The bank statement as of December 31 showed a balance of P547,800. Additional informationthat might be useful in reconciling the two balances follows:A. Check No. 748 for P30,000 was originally recorded on the books as P45,000.B. A customer's note dated September 25 was disCounted on October 12. The note wasdishonored on December 29, the note's maturity date. The bank charged Cajardo'saccount for P142,650, including a protest fee of P2,650.C. The deposit of December 24 was recorded on the books as P28,950 but it was actually adeposit of P27,000.D. Outstanding checks totaled P98,850 as of December 31.E. There was a bank service charge for December of P2,100 not yet recorded on the books.F. Cajardo's account had been charged on December 26 for a customer's NSF check forP12,960.G. Cajardo properly deposited P6,000 on December 3 that was not recorded by the bank.H. Receipts of December 31 for P134, 250 were recorded by the bank on January 2.1.A bank memo stated that a customer's note for P45, 000 and interest of P1,650 had beencollected on December 27 and the bank charge P360 collection fee.Based on the above and the result of your audit, answer the following questions:7. What is the adjusted cash in bank balance on December 31 ?8. The net adjustment to cash as of December 31, 2010 would be a credit of:Inon withVOur oramingtionthe Calige C ompany precenteo to vo u the following

Solution: Introduction: For the purpose of reconciliation of balances in book and bank balances, a…

Answered: ne above 7. What is the adjusted cash…

College Accounting (Book Only): A Career Approach

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

See similar textbooks

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.

Recommended textbooks for you

College Accounting (Book Only): A Career Approach

Accounting

ISBN:

9781337280570

Author:

Scott, Cathy J.

Publisher:

South-Western College Pub

Century 21 Accounting Multicolumn Journal

Accounting

ISBN:

9781337679503

Author:

Gilbertson

Publisher:

Cengage

Survey of Accounting (Accounting I)

Accounting

ISBN:

9781305961883

Author:

Carl Warren

Publisher:

Cengage Learning

College Accounting (Book Only): A Career Approach

Accounting

ISBN:

9781337280570

Author:

Scott, Cathy J.

Publisher:

South-Western College Pub

Century 21 Accounting Multicolumn Journal

Accounting

ISBN:

9781337679503

Author:

Gilbertson

Publisher:

Cengage

Survey of Accounting (Accounting I)

Accounting

ISBN:

9781305961883

Author:

Carl Warren

Publisher:

Cengage Learning

Financial Accounting

Accounting

ISBN:

9781305088436

Author:

Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:

Cengage Learning

Intermediate Accounting: Reporting And Analysis

Accounting

ISBN:

9781337788281

Author:

James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:

Cengage Learning

Auditing: A Risk Based-Approach (MindTap Course L…

Accounting

ISBN:

9781337619455

Author:

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

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS

ne above 7. What is the adjusted cash in bank balance on December 31? 8. The net adjustment to cash as of December 31, 2010 would be a credit of: ion wite examination the C lige Cemp any presented to vOu Hbe fell nno