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PROBLEM NO.1 Information that might be useful in preparing a bank reconciliation is as follows below. The bank statement for the checking account of Monica & Chandler Co. showed a December 31, 2021, balance of P1,463,212. a) Outstanding checks were P132,025. b) The December 31, 2021, cash receipts of P57,500 were not deposited in the bank until January 2, 2022. c) One check written in payment of rent for P24,600 was correctly recorded by the bank but was recorded by M&C Co. as P26,400 disbursement. d) In accordance with prior authorization, the bank withdrew P45,000 directly from the checking account as payment on a mortgage note payable. The interest portion of that payment was P35,000. M&C Co. has made no entry to record the automatic payment. e) Bank service charges of P1,400 was listed on the bank statement. f) A deposit of P87,500 was recorded by the bank on December 13, but it did not belong to M&C Co. The deposit should have been made to the checking account of SUM, Inc. g) The bank statement included a charge of P8,500 for an NSF check. The check was returned with the bank statement and the company will seek payment from the customer. h) M&C Co. maintains a P20,000 petty cash fund that was appropriately reimbursed at the end of December. i) According to instruction for M&C Co. on December 30, the bank withdrew P1,000,000 from the account and purchased Treasury Bills for M&C Co.. M&C Co. recorded the transaction in its books on December 31 when it received notice from the bank. Half of the treasury bills mature in two months and the other half in six months. 1) What is the cash in bank balance per books on December 31, 2021? 2) What is the corrected cash in bank balance on December 31, 2021? 3) What amount of cash and cash equivalents should be reported in the current asset section of the balance sheet on December 31, 2021?

PROBLEM NO.1 Information that might be useful in preparing a bank reconciliation is as follows below. The bank statement for the checking account of Monica & Chandler Co. showed a December 31, 2021, balance of P1,463,212. a) Outstanding checks were P132,025. b) The December 31, 2021, cash receipts of P57,500 were not deposited in the bank until January 2, 2022. c) One check written in payment of rent for P24,600 was correctly recorded by the bank but was recorded by M&C Co. as P26,400 disbursement. d) In accordance with prior authorization, the bank withdrew P45,000 directly from the checking account as payment on a mortgage note payable. The interest portion of that payment was P35,000. M&C Co. has made no entry to record the automatic payment. e) Bank service charges of P1,400 was listed on the bank statement. f) A deposit of P87,500 was recorded by the bank on December 13, but it did not belong to M&C Co. The deposit should have been made to the checking account of SUM, Inc. g) The bank statement included a charge of P8,500 for an NSF check. The check was returned with the bank statement and the company will seek payment from the customer. h) M&C Co. maintains a P20,000 petty cash fund that was appropriately reimbursed at the end of December. i) According to instruction for M&C Co. on December 30, the bank withdrew P1,000,000 from the account and purchased Treasury Bills for M&C Co.. M&C Co. recorded the transaction in its books on December 31 when it received notice from the bank. Half of the treasury bills mature in two months and the other half in six months. 1) What is the cash in bank balance per books on December 31, 2021? 2) What is the corrected cash in bank balance on December 31, 2021? 3) What amount of cash and cash equivalents should be reported in the current asset section of the balance sheet on December 31, 2021?

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter4: Internal Control And Cash
Section: Chapter Questions
Problem 16CE
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PROBLEM NO.1 Information that might be useful in preparing a bank reconciliation is as follows below. The bank statement for the checking account of Monica & Chandler Co. showed a December 31, 2021, balance of P1,463,212. a) Outstanding checks were P132,025. b) The December 31, 2021, cash receipts of P57,500 were not deposited in the bank until January 2, 2022. c) One check written in payment of rent for P24,600 was correctly recorded by the bank but was recorded by M&C Co. as P26,400 disbursement. d) In accordance with prior authorization, the bank withdrew P45,000 directly from the checking account as payment on a mortgage note payable. The interest portion of that payment was P35,000. M&C Co. has made no entry to record the automatic payment. e) Bank service charges of P1,400 was listed on the bank statement. f) A deposit of P87,500 was recorded by the bank on December 13, but it did not belong to M&C Co. The deposit should have been made to the checking account of SUM, Inc. g) The bank statement included a charge of P8,500 for an NSF check. The check was returned with the bank statement and the company will seek payment from the customer. h) M&C Co. maintains a P20,000 petty cash fund that was appropriately reimbursed at the end of December. i) According to instruction for M&C Co. on December 30, the bank withdrew P1,000,000 from the account and purchased Treasury Bills for M&C Co. M&C Co. recorded the transaction in its books on December 31 when it received notice from the bank. Half of the treasury bills mature in two months and the other half in six months. 1) What is the cash in bank balance per books on December 31, 2021? 2) What is the corrected cash in bank balance on December 31, 2021? 3) What amount of cash and cash equivalents should be reported in the current asset section of the balance sheet on December 31, 2021?
Transcribed Image Text:PROBLEM NO.1 Information that might be useful in preparing a bank reconciliation is as follows below. The bank statement for the checking account of Monica & Chandler Co. showed a December 31, 2021, balance of P1,463,212. a) Outstanding checks were P132,025. b) The December 31, 2021, cash receipts of P57,500 were not deposited in the bank until January 2, 2022. c) One check written in payment of rent for P24,600 was correctly recorded by the bank but was recorded by M&C Co. as P26,400 disbursement. d) In accordance with prior authorization, the bank withdrew P45,000 directly from the checking account as payment on a mortgage note payable. The interest portion of that payment was P35,000. M&C Co. has made no entry to record the automatic payment. e) Bank service charges of P1,400 was listed on the bank statement. f) A deposit of P87,500 was recorded by the bank on December 13, but it did not belong to M&C Co. The deposit should have been made to the checking account of SUM, Inc. g) The bank statement included a charge of P8,500 for an NSF check. The check was returned with the bank statement and the company will seek payment from the customer. h) M&C Co. maintains a P20,000 petty cash fund that was appropriately reimbursed at the end of December. i) According to instruction for M&C Co. on December 30, the bank withdrew P1,000,000 from the account and purchased Treasury Bills for M&C Co. M&C Co. recorded the transaction in its books on December 31 when it received notice from the bank. Half of the treasury bills mature in two months and the other half in six months. 1) What is the cash in bank balance per books on December 31, 2021? 2) What is the corrected cash in bank balance on December 31, 2021? 3) What amount of cash and cash equivalents should be reported in the current asset section of the balance sheet on December 31, 2021?
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