Problem 3Serato Company keeps all Its cash In a checking acount. An examination of the entity'saccounting records and bank statement for the month ended December 31, 2020 revealed abank statement balance of P8.469.000 and a book balance of P8,524,000. A deposit ofP950,000 placed in the bank's night depository on December 29 does not appear on the bankStatement. Checks outstanding on December 31 amount to P270, 000. The bank statementsnows that on December 25, the bank collected a note for Serato Company and credited theproceeds of P935,000 to the entity's account. The proceeds included P35,000 interest, all orWich Serato Company earned during the current period, Serato Company has not yet recordedthe said collection. Serato Company discovered that check number 1000759 written inDecember for P183,000 in payment of an account had been recorded in the entity's records asP138,000. Included with the December 31 bank statement was an NSF check for P250,000 thatSerato Company had received from Ana Company on December 20. Serato Company has notyet recorded the returned check. The bank statement shows a P15,000 service charge forDecember.3. The net adjustment to the cash account is:Problem 4The following items were included as cash in the books of Roa Company:P (1,200)5,335Checking account at Security BankChecking account at BPIChecking account at City Trust used for paymentof salaries5,500107Postage stampsEmployee's postdated checkIOU from an employeeA check marked DAIF2,3002001,250500Postal money orderPetty cash fund (P324 in expense receipts)Certificate of time deposit with BPIA gold ring surrendered as security by a customerwho lost his wallet (at market value)5005,0001,5004. The correct amount that should be reported as cash is:Problem 5Racman, Inc. needs P2,000,000 to finance its extension program. Racman, Inc. is negotiating aloan with Metropolis Bank which requires the company to maintain a compensating balance of10% of the loan principal on deposit in a current account at the bank. Pierce, Inc. currentlymaintains a balance of P20,000 in its current account. The current account earns interest of 2%per annum. The interest rate on the loan is 12% per annum.5. What is the effective interest rate on the loan? Part II. Problem SolvingProblem 1The bookkeeper of Tinhay Company recently prepared the following bank reconciliation:Tinhay CompanyBank ReconciliationDecember 31, 2021Balance per bankP 126,420Add:Deposit in transitCharge on checkbook printingError made in recording Check No. 25P 8,700210issued in December1,6005,000NSF check15,510P 141,930TotalDeduct:Outstanding checksNote collected by bank (indudes P50interest)Balance per booksP4,48013,980P 127,9509,500Hoover has P9,100 cash on hand on December 31, 2021.1. The amount Hoover should report as cash on the statement of financial position as ofDecember 31, 2021 should be:Problem 2Sibla, Inc. had the following bank reconciliation at March 31, 2021:Balance per bank, 3/31/2021Deposit in transitP37,20010,30047,500(12,600)34,900TotalOutstanding checksBalance per books, 3/31/2021PData per bank for the month of April 2021 follow:DepositsDisbursementsP42,70049,700All reconciling items at March 31, 2021 deared the bank in April. Outstanding checks at April30, 2021 totaled P5,000. There were no deposits in transit at April 30, 2021.2. What is the cash balance per books at April 30, 2021?

Question

Accepted Answer

“Since you have posted a question with multiple sub-parts, we will solve first three subparts for…