STRAIGHT PROBLEMS Problem 13 Computation of Cash Shortage Using Proof of Cash You have been assigned to the audit of Jackson Company. You acquired the following information: A. B. E F. Balances of cash account per the general ledger at November 30, 2020 and December 31, 2020, were P 380,200 and P 97,700, respectively. Balance on checking accounts at the Banco De Oro at December 31, per bank confirmation was P 100,000 C. Outstanding checks at December 31 amounted to P 40,000. D. An NSF Check for P 2,450 was charged by the ban in December. This check was obtained from a customer on account Deposits in transit at the beginning and end of month were P 25,000 and P 35,000, respectively. Exchange and collection charges deducted by the bank in the amount of P 250 for December have not been recorded. Those charges for the month of November totaled P 200. G. The reconciliation data as of November 30 showed that the balance per bank statement was P 450,000 and the outstanding checks totaled P 100,000. H. In November, the bank charged in error a P 2,600 check to the Jackson Company account. It was corrected by the bank in December. Total deposits shown by the bank statement for December amounted to P 1,000,000 Following is a summary of cash receipts and disbursements for the month indicated: November - Receipts, P 1,024,700 and Disbursements, P 1,298,800; December - Receipts, P 1,007,400 and Disbursements, P 1,289,900. 1. J. RcYulicu. 3. 1. Prepare proof of cash for December 2020. 2. Make the necessary adjusting journal entries at December 31, 2020, What amount should be reported as cash in the statement of financial position as of December 31, 2020? SOLUTION 1. Proof of cash for December 2020. JACKSON COMPANY Proof of Cash For the month of December, 2020 Beginning 1/12/2020 December, 2020 Receipts Disburse Ending 12/31/2020 Book Balances, unadjusted NSF Check in December Exchange and collection charges: November December Book Balances, unadjusted Overstated cash payments (Shortage) Book Balances, adjusted 0 Bank Balances, unadjusted Outetandin Balance adicted Charle Bank Balances, unadjusted Outstanding Balances, adjusted Checks: November December Deposit in transit: November December Erroneous charging in December Bank Balances, adjusted 0 0 0 0 2. The necessary adjusting journal entries at December 31, 2020. Account Names Debit Credit Date 2020 Dec 31 2. The necessary adjusting journal entries at December 31, 2020. Account Names Debit Credit Date 2020 Dec 31 3. The amount that should be reported as cash in the statement of financial position as of December 31, 2020
