Question
Problem 1. Your audit senior instructed you to make a four-column proof of cash receipts and disbursements for the month of December 2010. The bank
Problem 1. Your audit senior instructed you to make a four-column proof of cash receipts and disbursements for the month of December 2010.
The bank reconciliation prepared byCubaoCompany at November 30 is reproduced below:
Unadjusted bank balance
96,800
Unadjusted book balance
58,640
Add: deposit in transit
18,000
Add: CM-note collected
40,320
TOTAL
114,800
TOTAL
98,960
Less: outstanding checks
Less: DM bank charges
160
No. 276
2,400
No. 282
7,200
No. 284
4,800
No. 285
1,600
_________
Adjusted balance
98,800
Adjusted balance
98,800
The December bank statement, which has a beginning balance of P96,800 is reproduced below:
May Bank
Account Name:CubaoCompany
Date - Month of December
Debits
Credits
01
18,000
02
7,200
40,000
04
24,000
40,000
06
48,000
08
400,000 - CM83
10
40,000 DM97
11
56,000
16
20,000
18
64,000
21
72,400
28
36,000
80,000
31
4,000 DM98
64,000 CM84
Totals
131,200
842,400
DM97-Customer's DAIFcheckCM83- note collected by the bank
DM98-Service chargesCM84-Account collected by the bank
The company's cash receipts and cash disbursements journals for the month of December 2010 are provided below:
Cash Receipts Journal
Cash Disbursements Journal
Date
OR #
Amount
Date
Check #
Amount
Dec. 01
415
40,000
Dec. 01
286
16,000
05
416
48,000
03
287
24,000
10
417
56,000
10
288
32,000
17
418
64,000
14
289
20,000
20
419
72,000
20
290
28,000
27
420
80,000
23
291
36,000
31
421
88,800
26
292
40,000
28
293
44,000
_________
31
294
48,000
Total
440,800
Total
304,000
The company's Cash in Bank ledger appearsbelow:
Cash in Bank
Balance58,640
12/31/10CDJ304,000
12/01/10GJ40,320
12/10/10GJ (CM83)400,000
12/31/10CRJ440,800
Questions: Based on the application of the necessary audit procedures and appreciation of the above data, you are to provide the answers to the following: (show comprehensive solution by providing proof of cash)
- How much is the outstanding checks as of December 31, 2010?
- How much is the adjusted book receipts for December 2010?
- How much is the adjusted book disbursements for December 2010?
- How much is the adjusted cash balance as of December 31, 2010?
- How much is the cash shortage as of December 31, 2010?
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Advanced Accounting
Authors: Debra JeterJames Reeve, Jonathan Duchac, Horace Brock, Paul Chaney
4th Edition
0470506989, 978-0470506981
