Auditing and Assurance Services (16th Edition)
16th Edition
ISBN: 9780134065823
Author: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Chris E. Hogan
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 23, Problem 19DQP
a.
To determine
Prepare a
b.
To determine
Prepare all
c.
To determine
Explain the
d.
To determine
State the amount of cash balance that must appear on the July 31, 2016, financial statements.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
You are auditing general cash for the Tampa Supply Company for the fiscal year ended March 31, 2019. The client has not prepared the March 31 bank reconciliation. After a brief discussion with the owner, you agree to prepare the reconciliation, with assistance from one of Tampa Supply's clerks.
General Ledger
Bank Statement
Beginning balance 3/1/19
7,637
9,513
Deposits
25,336
Cash receipts journal
26,512
Checks cleared
(25,629)
Cash disbursements journal
(23,824)
March bank service charge
(75)
Note paid directly
(4,500)
NSF check
(2,071)
Ending balance 3/31/19
10,325
2,574
Balance per bank
9,513
Deposits in transit
620
Outstanding checks
2,496
Balance per books
7,637
1.
Checks clearing that were outstanding on February 28 totaled $2,477.
2.
Checks clearing that were recorded in the Marchdisbursements journal totaled $21,205.
3.
Deposits included $620 from…
You are conducting an audit of the MART CORPORATION for the year ended December 31, 2018. The internal control procedures surrounding cash transactions were not adequate. Jane Quipit, the bookkeeper-cashier handles cash receipts, maintains accounting records and prepares the monthly reconciliations of the bank account. She prepared the following reconciliation at the end of the year:
Balance per bank statement P 315,000
Add : Deposit in transit P 157,725
Note collected by bank 13,500 171,225
Balance P 486,225
Less : Outstanding checks 222,075
Balance per general ledger P 264,150
In the process of your audit, you gathered the following:
At December 31, 2018, the bank statement and the general ledger showed balances of P315,000 and P264,150 respectively.
The cut off bank statement showed a bank charge on January 02, 2019 for P35,250 representing a correction of an erroneous bank credit.
Included in the list of outstanding checks were the following:
A check payable to a…
You are auditing the cash account of Vhina Inc. for the fiscal year ended July 31, 2020. The client has not prepared the July 31, bank reconciliation. The following information were made available:
Audit notes:
a. Bank reconciliation in June included the following information: Bank statement balance, June, P172,590; Deposits in transit, P18,000; Outstanding checks, P52,260, and; Balance per general ledger, June, P140,330.
b. Checks clearing the bank in July, outstanding by the end of June was at P50,760.
c. Checks clearing the bank in July and were recorded in the July cash disbursement journal was at P614,010.
d. A check for P31,800 cleared the bank, but had not been recorded in the cash disbursement journal. It was for a payment of an accounts payable.
e. A check for P11,880 was erroneously charged by the bank to Vhina Inc.
f. Deposits included P18,000 from June and P733,680 from July.
g. The bank charged Vhina Inc.'s account for a non-sufficient-fund check totaling to P9,330 The…
Chapter 23 Solutions
Auditing and Assurance Services (16th Edition)
Ch. 23 - Explain the relationships among the initial...Ch. 23 - Prob. 2RQCh. 23 - Prob. 3RQCh. 23 - Prob. 4RQCh. 23 - Prob. 5RQCh. 23 - Prob. 6RQCh. 23 - Prob. 7RQCh. 23 - Prob. 8RQCh. 23 - Prob. 9RQCh. 23 - Prob. 10RQ
Ch. 23 - Prob. 11RQCh. 23 - Prob. 12RQCh. 23 - Prob. 13RQCh. 23 - Prob. 14.1MCQCh. 23 - Prob. 14.2MCQCh. 23 - Prob. 14.3MCQCh. 23 - Prob. 15.1MCQCh. 23 - Prob. 15.2MCQCh. 23 - Prob. 15.3MCQCh. 23 - Prob. 16.1MCQCh. 23 - Prob. 16.2MCQCh. 23 - Prob. 16.3MCQCh. 23 - Prob. 17DQPCh. 23 - Prob. 18DQPCh. 23 - Prob. 19DQPCh. 23 - Prob. 20DQPCh. 23 - Prob. 21DQPCh. 23 - You are doing the first-year audit of Sherman...Ch. 23 - Prob. 23DQPCh. 23 - McNeil Company, a medium-sized manufacturer of...Ch. 23 - The amount of subjectivity involved in...
Knowledge Booster
Similar questions
- In preparing the June 30th bank reconciliation, the accountant identified the following items: Company's checkbook balance $23,000, Outstanding Checks $550, Interest earned on the checking account $100, Customer's NSF (non sufficient funds) check returned by the bank $1,000. In the process of preparing the reconciliation, the accountant discovered an error in recording a customer's check; the amount was incorrectly recorded on the books as a cash receipt of $600, while the bank correctly recorded the amount as $650. What is the company's adjusted cash balance on June 30th? A. $21,700 B. $22,150 C. $22,250 D. $22,200arrow_forwardThe following information was obtained in connection with the audit of Kathereen Hyacinth Co’s cash account as of December 31,2021:· Cash balance per general ledger on December 31 was P37,500. The company recorded actual company collections amounting to P152,500 from its customers during December. Also in December, the company recorded bank service charges of P2,500, including November bank service charges of P1,500. The December bank statement showed total deposits credited by the bank of P145,000 and total checks paid amounting to P133,750 and bank service charges of P3,250.· The Outstanding checks on November 30 and December 31 were P16,250 and P12,500 respectively while deposit in transit on November 30 was P12,500· The cash receipts book of December is under-footed by P2,500.· The bank erroneously charged the company’s account for a P3,750 check for another company. This bank error was corrected on January 2022.What is the Deposit in transit, December…arrow_forwardThe following information was obtained in connection with the audit of Kathereen Hyacinth Co’s cash account as of December 31,2021:· Cash balance per general ledger on December 31 was P37,500. The company recorded actual company collections amounting to P152,500 from its customers during December. Also in December, the company recorded bank service charges of P2,500, including November bank service charges of P1,500. The December bank statement showed total deposits credited by the bank of P145,000 and total checks paid amounting to P133,750 and bank service charges of P3,250.· The Outstanding checks on November 30 and December 31 were P16,250 and P12,500 respectively while deposit in transit on November 30 was P12,500· The cash receipts book of December is under-footed by P2,500.· The bank erroneously charged the company’s account for a P3,750 check for another company. This bank error was corrected on January 2022.Adjusted cash in bank balance, December…arrow_forward
- While preparing the February 28 bank reconciliation, the accountant identifies the following items: company’s balance according to the general ledger, $23,100; outstanding cheques, $550; interest earned on the chequing account, $100; a customer’s NSF cheque returned by the bank, $1,000. While preparing the reconciliation, the accountant discovers an error in recording a customer’s cheque; the amount has been incorrectly recorded on the books as a cash receipt of $600, while the bank correctly has recorded the amount as $650. What is the company’s adjusted cash balance on February 28? $22,250 $22,200 $22,150 $21,700arrow_forward3DD Corporation engaged your service to audit its account. In your examination of cash, you find that the Cash account represents both cash on hand and cash in bank. You further noted that there is very poor internal control over cash. Your audit covers the period ended December 31, 2017. You made a cash account on January 15, 2018, and cash on hand in this date was determined to be P52,000. Examination of cashbooks and other evidences of transaction disclosed the following: a. January 1 through 15, 2018 collections per duplicate receipts, P199,000. b. Total duplicate deposit slips, all dated January 2 through 15, P110,000, includes a deposit representing collections of December 31 c. Cash book balance on December 31, 2017 is P465,000, representing both cash on hand and cash in bank. d. Bank statement for December shows a balance of P424,000. e. Outstanding checks at December 31: Number 183 4,500 Number 254 4,000 Number 198 12,500 Number 280 52,000…arrow_forward3DD Corporation engaged your service to audit its account. In your examination of cash, you find that the Cash account represents both cash on hand and cash in bank. You further noted that there is very poor internal control over cash. Your audit covers the period ended December 31, 2017. You made a cash account on January 15, 2018, and cash on hand in this date was determined to be P52,000. Examination of cashbooks and other evidences of transaction disclosed the following: a. January 1 through 15, 2018 collections per duplicate receipts, P199,000. b. Total duplicate deposit slips, all dated January 2 through 15, P110,000, includes a deposit representing collections of December 31 c. Cash book balance on December 31, 2017 is P465,000, representing both cash on hand and cash in bank. d. Bank statement for December shows a balance of P424,000. e. Outstanding checks at December 31: Number 183 4,500 Number 254 4,000 Number 198 12,500 Number 280 52,000…arrow_forward
- In conducting your audit of Black Company's cash in bank, you noted the following. Checks and charges recorded by bank in June (including a June service change of P 300), P 172,100. Service charge made by bank in May and recorded on the books in June, P 200: Total of credits to cash in a journals during June, P 198,020, Customer's NSF check returned in May and redeposited in June (no entry made on books in either May or June). P 2.500; Outstanding checks at June P80,800 and deposit in transit in June. P 6,000. What were the total outstanding checks at the beginning of June?arrow_forwardAssume that you have audited accounts receivable as of 12/31/2020 and are confident that the ending balance should be $7,188,000. Further, you know that the audited balance as of 12/31/2019 was $8,462,000. You also verified cash deposits from customers through a review of the bank account. Based on that review you believe that cash receipts from customers ranges from an amount of $40,000,000 to $41,000,000. Which amount below would represent an overstatement of revenue for the year ending 12/31/2020, based on the facts above? 1. $38,500,000 2. $41,000,000 3. $39,762,000 4. $39,100,000arrow_forwardDuring the preparation of a bank reconciliation, the assistant controller discovered that the Bank incorrectly recorded a $3290 check as $329. The controller has decided not to notify the bank but wait for the bank to detect the error. The controller plans to record the $2961 error as "Other Income" if the Bank fails to detect the error within the next three months. Please discuss whether the controller is behaving in an ethical manner. How are cash equivalents reported in the financial statements? Please list two examples of cash equivalents.arrow_forward
- 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 bankloan.• 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 yourclient for P3,000 was erroneously debited to the account of MIG Company. No corrections were made during the month.• June book debits –…arrow_forwardIn 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 bankloan.• 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 yourclient for P3,000 was erroneously debited to the account of MIG Company. No corrections were made during the month.• June book debits –…arrow_forwardIn 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 bankloan.• 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 yourclient for P3,000 was erroneously debited to the account of MIG Company. No corrections were made during the month.• June book debits –…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage Learning
College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub