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Intermediate Accounting 1 – (CASH) Prelims Assignment 5

Prof. Judith Francisco – Luna

Name _____________________________________________ Section _____________ Date ________________


I. Write the CAPITAL LETTER of the best answer for each of the following items.

_____ 1. Eternity Company reported a balance of P43,000 in its Cash account at the end of the month. There
were P20,000 deposits in transit and P15,000 of outstanding checks. The bank statement showed a balance of
P50,000, service charges of P6,000 and the proceeds of note collected by the bank for the company. The note
had a face value of P15,000.
The interest on the note collected by the bank was
A. P12,000 B. P9,000 C. P6,000 D. P3,000

_____ 2. Bataan Company’s checkbook balance at December 31, 2019 was P50,000. In addition, Bataan held the
following items in its safe on that date.
Check payable to Bataan, dated December 31, 2019 in payment of a sale made in December 2019 not
included in December 31, checkbook balance. P 20,000
Check payable to Bataan, deposited December 15 but returned by bank on December 30 marked “NSF”.
The deposit and the return were both reflected in the checkbook. 5,000
Check drawn on Bataan Company’s account, payable to a vendor, dated December 30, but not yet
mailed to payee as of December 31, 2019. The check is not yet recorded. 3,000

The amount to be shown as Cash on Bataan’s statement of financial position at December 31, 2019 is
A. P48,000 B. P65,000 C. P68,000 D. P70,000

_____ 3. The Bevo Company Cash account had a balance of P962 on August 31. This included a bank deposit of
P87 that was in transit on the 31st. The August 31 bank statement contained the following information:
Bank statement balance P1,089
NSF check 16
Bank service charge 7
Collection of notes receivable (net) 68

Bevo also had checks outstanding of P169. What is Bevo’s reconciled balance?
A. P920 B. P962 C. P1,007 D. P1,089

_____ 4. The petty cash box, upon investigation, showed the following items:
Bills P450 and coins P50
Vouchers for: taxi fare P95, supplies P155
An envelope containing contributions of employees for the Christmas party, P200.

How much was the total amount of the petty cash fund?
A. P500 B. P250 C. P700 D. P750
Data for Nos. 5 – 7
The accounting department is furnished with the following data in reconciling the bank statement for Gem
Cash balance per books P 14,692.71
Deposits in transit 2,615.23
Bank service charge 21.00
Outstanding checks 3,079.51
Notes collected by bank including P45 interest (Gem not yet
notified) 1,045.00
Error by bank – check drawn by Gemo was charged to Gem’s account 617.08
Sale and deposit of P1,729 was entered in books as P1,792
_____ 5. How much was the unadjusted balance per bank?
A. P13,731.71 B. P14,692.71 C. P15,653.71 D. P15,500.91
_____ 6. How much was the adjusted bank and book balance?
A. P13,731.71 B. P14,692.71 C. P15,653.71 D. P15,500.91
_____ 7. What is the adjusting entry to adjust the cash account?
A. Miscellaneous Expense 84 C. Miscellaneous Expense 21
Cash 961 Sales 63
Notes Receivable 1,000 Cash 961
Interest Revenue 45 Notes Receivable 1,000
Interest Revenue 45
B. Cash 961
Notes Receivable 961

_____ 8. The following information pertains to RCA Co. at December 31, 2019:

Checkbook balance P12,000

Bank statement balance 16,000
Check drawn on RCA’s account payable to
a vendor, dated and recorded 12/31/2019
but not mailed until 1/10/2020 2,200

On RCA’s December 31, 2019 balance sheet, what amount should be reported as cash?
A. P12,000 B. P13,800 C. P14,200 D. P16,000

_____ 9. The Gold Car Co., in preparing a bank reconciliation on May 31, 2019, discovered two errors: (1) a P250
check of the God Bar Co. was deducted from the Gold Car Co.’s bank balance on May 25, 2019 and (2) a Gold
Car Co. check in the amount of P680 was recorded in Gold Car Co.’s check register as P860 on May 8, 2019.
In recording the adjustments to the Gold Car Co. ”Cash in Bank” account to correct the errors, there should be
A. P 430 credit to the “Cash in Bank” account.
B. P 250 credit to the “Cash in Bank” account.
C. P 180 debit to the “Cash in Bank” account.
D. P 250 debit to the “Cash in Bank” account.
Data for Nos. 10 – 11
Upon examination of the petty cash fund of Maverick Company on January 3, 2020, the following items were
Total bills and coins P 1,825
Certified check of general manager dated December 15, 2019 1,500
Petty cash vouchers (PCVs) not yet replenished:
PCV #7163 Postage stamps 280
PCV #7164 Supplies 650
PCV #7165 IOU of employee 500
Company check representing replenishment of petty cash fund 5,150
Unused postage stamps 120
An envelope containing contributions of employees for the death of a
fellow employee (contents intact) 3,000

The petty cash fund was established for an amount of P10,000.

_____ 10. What is the correct amount of petty cash fund at December 31, 2019?
A. P9,905 B. P8,475 C. P6,975 D. P1,825
_____ 11. What is the amount of cash shortage or overage?
A. P95 shortage C. P215 shortage
B. P25 overage D. cannot be determined.

_____ 12. ABC Corp. provided the following information for the purpose of reconciling the cash balance per
book with the balance per bank statement on December 31, 2019:
A. As of December 31, 2019 the bank statement showed a balance of P100,000.
B. As of December 31, 2019, outstanding checks amounted to P25,000 including a certified check of P5,000.
C. On December 31, 2019, deposit in transit was P10,000.
D. During December 31, 2019, the bank charged back NSF checks amounting to P7,500 of which P2,500 had
been redeposited and cleared by the bank on December 27, 2019.
E. On December 23, 2019, the bank erroneously credited the account of ABC for P15,000 representing proceeds
of loan granted to ABC Corp.
F. During December 2019, the proceeds from notes collected by the bank of ABC amounted to P37,500, net of
service charge of P1,000.
What is the cash balance to be shown on the balance sheet on December 31, 2019?
A. P90,000 B. P75,000 C. P70,000 D. P42,500

_____ 13. In reconciling the book and bank balances of Pearl Corporation, you discover the following for the
month of December 2019:
Balance per bank statement P45,000
Balance per books 34,000
Receipts of December 31, 2019 not deposited until January 3, 2020 10,000
Bank service charges for December 300
DAIF check returned with the December bank statement, P3,200.
A paid check for P4,000 was recorded in the cash register as P400.
Customer’s check for P25,200 was recorded in the cash receipts journal as P22,500.
Charges per bank statement included a check of Pear Company erroneously charged in the amount of P8,000.
Assuming no errors except as noted, the amount of outstanding checks is
A. P16,200 B. P29,600 C. P33,400 D. P63,000
Data for Nos. 14 – 16
The following bank reconciliation is presented for the Pony Co. for the month of November 2019:
Balance per bank statement, 11/30/19 P 180,400
Add: Deposit in transit P 41,500
Erroneous bank charge 15,000 56,500
Total P 236,900
Less: Outstanding checks 78,200
Balance per books, 11/30/19 P 158,700
Data for the month of December 2019 follow:
Per bank: December deposits/credits P 261,000
December charges/debits 224,200
Balance, December 31, 2019 217,200
All items that were outstanding as of November 30 cleared through the bank in December, including bank
charge. In addition, P25,000 in checks were outstanding as of December 31, 2019.

_____ 14. What is the amount of cash disbursements per books in December 2019?
A. P146,000 B. P171,000 C. P249,200 D. P247,200
_____15. What is the amount of cash receipts per books in December 2019?
A. P204,500 B. P219,500 C. P246,000 D. P317,500
_____ 16. What is the cash balance per books at December 31, 2019?
A. P257,200 B. P242,200 C. P207,200 D. P192,200

Data for Nos. 17 – 18

Garnet Company is preparing its March 31 bank reconciliation. The following data are available:
a. March data: Per bank Per books
Balance, February 28 P 741,400 P 719,400
March deposits reflected 476,000 490,000
March checks reflected (617,000)* (610,000)
Note collected (including P2,000 interest) 202,000
Service charge ( 1,200) ________
Balance, March 31 P 801,200 P 599,400
======== ========
b. From the February 28 bank reconciliation:
Deposit in transit, P17,000
Outstanding checks, P39,000
* Erroneously includes a check drawn by Garment Company for P15,000.
_____ 17. The deposits in transit at March 31 is
A. P45,000 B. P31,000 C. P14,000 D. P3,000

_____ 18. What is the amount of outstanding checks at March 31?

A. P47,000 B. P15,000 C. P8,000 D. P7,000
_____ 19. North Company had the following bank reconciliation at March 31, 2019:
Balance per bank statement, 3/31/2019 P 232,500
Add: Deposit in transit 51,500
P 284,000
Less: Outstanding checks 63,000
Balance per books, 3/31/2019 P221,000
Data per bank statement for the month of April 2019 follow:
Deposits P 292,000 Disbursements P 248,500

All reconciliation items at March 31, 2019 cleared through the bank in April. Outstanding checks at April 30,
2019 totaled P37,500.
What is the amount of Cash Disbursements per books in April 2019?
A. P223,000 B. P248,500 C. P274,000 D. P286,000

Data for Nos. 20 & 21

Quinn Company’s bank statement at January 31 shows a balance of P13,360, while the ledger account for Cash
in Quinn’s ledger shows a balance of P12,890 at the same date. The only reconciling items are the following:
- Deposit in transit, P890.
- Bank service charge, P24
- NSF check from customer Greg Denton in the amount of P426.
- Error in recording Check No.389 for rent: check was written in the amount of P1,320, but was
recorded in the bank statement as P1,230.
_____ 20. What is the total amount of outstanding checks at January 31?
A. P1,048 B. P868 C. P1,900 D. P1,720
_____ 21. Assuming a single journal entry is made to adjust Quinn Company’s accounting records at January 31,
the journal entry includes:
A. A debit to Rent Expense for P90.
B. A credit to Accounts Receivable, G. Denton, for P426.
C. A credit to Cash for P450.
D. A credit to Cash for P1,720.