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Cash Additional Topics

The document provides information from an audit of GPB Company's bank reconciliation for June 2017. It includes the May 2017 bank reconciliation statement, details from the June 2017 bank statement such as deposits, withdrawals and fees, and a list of paid checks from June. The assistant is asked to prepare the June 30 bank reconciliation and provide unadjusted book balances based on this information.

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43 views2 pages

Cash Additional Topics

The document provides information from an audit of GPB Company's bank reconciliation for June 2017. It includes the May 2017 bank reconciliation statement, details from the June 2017 bank statement such as deposits, withdrawals and fees, and a list of paid checks from June. The assistant is asked to prepare the June 30 bank reconciliation and provide unadjusted book balances based on this information.

Uploaded by

andreamrie
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Problem 2-10 Proof of Cash

You have been instructed by your supervisor on an audit of GPB Company to prepare a four-
column proof of cash receipts and disbursements for the month of June, 2017. The bank
reconciliation statement prepared by the client in May is reproduced below:

May 2017 Reconciliation


Bank Balance P32,600 Book Balance P28,540
Plus Undeposited Collections, Plus proceeds of notes
May 31 500 receivable collected by the
bank in May 3,500
Total 33,100 Plus deposit made in bank on
May 31 not recorded on
books until June 100
Total 32,140
Less Outstanding Checks Less May bank service
charges 40
140 P500
152 400
153 100 1,000
Adjusted Bank Balance P32,100 Adjusted Book Balance P32,100

Upon inquiry about the client’s June 30 bank reconciliation, you were informed that it has been
lost and that the client is too busy at this time to prepare another. Your supervisor tells you to get
the June bank statement and paid checks and to prepare the June 30 reconciliation so that you
may complete the June proof of cash. The June bank statement is reproduced below:

Bank of the Philippine Island


Account Name: GPB Company
Date Disbursements Receipts
June 1 400 500
June 7 100
June 10 700 1,000
June 15 200
June 20 600 2,800
June 27 900
June 29 (E) 100 (EC) 100
June 30 (SC) 10
June 30 (DM) 150

SC – Service Charges E - Error


EC – Error Corrected DM – Debit Memo

The Debit memo on June 30 represents customer NSF check returned by the bank. The check
was redeposited by the client in the bank on July 1.

Cash received for the period June 21 through June 30 of P 3,500 was deposited in the bank on
July 1.

The paid checks accompanying this bank statement (all clearing in June) were:
No. 152 P400
No. 153 P100
No. 154 P700
No. 155 P200
No. 157 P600
No. 158 P900

The check register revealed that the last check in June was No. 159 for P250 and that Check
no. 156 was for P130.

Required:
1. Unadjusted book receipts in June 30, 2017.
2. Unadjusted book disbursements in June 30, 2017.
3. Unadjusted book balance as of June 30, 2017.

Problem 2-11 Interbank Transfers Schedule


The information below was taken from the bank transfer schedule prepared during the audit of
INDAY Co.’s financial statements for the year ended December 31, 2017. Assume all checks
are dated and issued on December 30, 2017.

Disbursement Date Receipt Date


Check No. From To Per Books Per Bank Per Books Per Bank
101 BDO BPI Dec. 30 Jan. 4 Dec. 30 Jan. 3
202 PNB RCBC Jan. 3 Jan. 2 Dec. 30 Dec. 31
303 BPI HSBC Dec. 31 Jan. 3 Jan. 2 Jan. 2
404 RCBC BOC Jan. 2 Jan. 2 Jan. 2 Dec. 31

Which of the above checks might indicate kiting?

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