Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Your senior auditor instructed you to prepare a four-column proof of cash receipts and disbursements for the month of August 2014. The bank reconciliation prepared
Your senior auditor instructed you to prepare a four-column proof of cash receipts and disbursements for the month of August 2014. The bank reconciliation prepared by FAILNOT Company at July 31 is reproduced below (all book adjustments were recorded in August): | |||
bank | book | ||
Balance | 52,000 | 40,000 | |
Deposits in transit, July 31 | 900 | ||
Outstanding checks: | 200 | ||
436 | 1,800 | ||
450 | 1,400 | ||
451 | 600 | ||
454 | |||
Proceeds of Note receivable collected by bank in July | 8,000 | ||
Deposits made in bank on July 31 not recorded in books until August | 1,000 | ||
Bank service charge | 100 | ||
`Adjusted balance | |||
Upon inquiry about the clients August 31 bank reconciliation, you were informed that it has been lost and that the client is too busy at this time to prepare another. Your senior auditor told you to get the August bank statement and paid checks and to prepare the August 31 reconciliation so that you may complete the August proof of cash. The august bank statement is reproduced below: | |||
Bank of Judah | |||
Account Name: FAILNOT Company | |||
Date | Checks | Ref | Deposits |
31-Jul | |||
1-Aug | Php1,800 | Php 900 | |
6-Aug | 1,400 | 10,000 | |
9-Aug | 600 | ||
12-Aug | 140 | DM | 140 |
15-Aug | 1,000 | 14,000 | |
20-Aug | 700 | ||
27-Aug | 1,440 | 100 | |
29-Aug | 100 | EC | |
31-Aug | 440 | SC | |
31-Aug | 300 | DM | |
31-Aug | 1,820 | ||
SV Service charge; DM Debit Memo; EC error corrected; CM credit memo. The checks paid accompanying this bank statement (all clearing in August) were (checks listed in order of payment by bank). No. 450, P1,800; No. 451, P1,400; No. 454, P600; No. 455, P1,000; No. 456, P700; No. 458, P1,440; and No. 459, P1,820. The check register revealed that the last check issued in August was No. 460 for P1,000 and that check No. 457 was for P2,400. Cash received for the period of August 21 through 31 of P9,400 was deposited in the bank on September 1. The debit memo on August 12 and August 31 were customer NSF checks returned by the bank. The check on August 12 was immediately redeposited without entry. The check returned on August 31 was redeposited by the client in the bank on September 1 without entry. | |||
Required: Prepare Proof of Cash & PAJE |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started