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  NAME: SECTION: DATE: Quiz No. 5: SET BAAC (CCE, Receivables, Inventories, and Investments) ScorePtsNo.Answer  /10PROBLEM 1 / 2 1/ 2 2/ 2 3/ 2 4/ 2 5  /5PROBLEM 2 / 5 1  /10PROBLEM 3 / 2 1/ 2 2/ 2 3/ 2 4/ 2 5  /6PROBLEM 4 / 1 1/ 1 2/ 1 3/ 1 4/ 1 5/ 1 6  /10PROBLEM 5 / 4 1/ 3 2/ 3 3  /20PROBLEM 6 / 1 1/ 1 2/ 2 3/ 2 4/ 2 5/ 2 6/ 3 7/ 4 8/ 3 9  /7PROBLEM 7 / 1 1/ 2 2/ 2 3/ 2 4  /2PROBLEM 8 / 2 1  Bank Statement Total 15,831.70 PROBLEM 1 The bank portion of the bank reconciliation for Angelo Company at October 31, 2016 was as follows:  Angelo Company Bank Reconciliation October 31, 2016 Cash Balance per Bank P 12,367.90  Add: Deposit in transit 1,530.20 P 13,898.10 Less: Outstanding checks Check Number Check Amount 2451 P 1,260.40 2470 720.10 2471 844.50 2472 426.80 2474 1,050.00 4,301.80  Adjusted cash balance per bank P 9,596.30 The adjusted cash balance per bank agreed with the cash balance per books at October 31. The November bank statement showed the following checks and deposits. Date Checks Number  Amount Deposits Date  Amount 11-1 2470 720.10 11-1 1,530.20 11-2 2471 844.50 11-4 1,211.60 11-5 2474 1,050.00 11-8 990.10 11-4 2475 1,640.70 11-13 2,575.00 11-8 2476 2,830.00 11-18 1,472.70 11-10 2477 600.00 11-21 2,945.00 11-15 2479 1,750.00 11-25 2,567.30 11-18 2480 1,330.00 11-28 1,650.00 11-27 2481 695.40 11-30 1,186.00 11-30 2483 575.50 Total 16,127.90 11-29 2486 900.00 Total 12,936.20 The cash records per books for November showed the following: Date Cash Payments Journal Number  Amount Date Number Amount Cash Receipts Journal Date Amount 11-1 2475 1,640.70 11-20 2483 575.50 11-3 1,211.60 11-2 2476 2,830.00 11-22 2484 829.50 11-7 990.10 11-2 2477 600.00 11-23 2485 974.80 11-12 2,575.00 11-4 2478 538.20 11-24 2486 900.00 11-17 1,472.70 11-8 2479 1,570.00 11-29 2487 398.00 11-20 2,954.00 11-10 2480 1,330.00 11-30 2488 800.00 11-24 2,567.30 11-15 2481 695.40 Total 14,294.10 11-27 1,650.00 11-18 2482 612.00 11-29 1,186.00 11-30 1,225.00 The bank statement contained two bank memoranda: 1.    A credit of P2,105.00 for the collection of a P2,000 note for Angelo Company plus interest of P120 and less a collection fee of P15. Angelo company has not accrued any interest on the note. 2.    A debit for the printing of additional company checks, P50.  At November 30, the cash balance per books was P11,123.90, and the cash balance per the bank statement was P17,604.60. The bank did not make any errors, but Angelo Company made two errors. Note: The correction of any errors pertaining to recording checks should be made to Accounts Payable. The correction of any errors relating to recording cash receipts should be made to Accounts Receivable QUESTIONS: 1. The unadjusted cash ledger balance of ANGELO COMPANY at November 30, 2016 is: 2. The unadjusted bank balance of ANGELO COMPANY at November 30, 2016 is: 3. The outstanding checks of ANGELO COMPANY at November 30, 2016 is: 4. The deposit in transit of ANGELO COMPANY at November 30, 2016 is: 5. The adjusted book balance of ANGELO COMPANY at November 30, 2016 is:  PROBLEM 2 The following items are found in the cash account of Ivie Company at December 31, 2016 . The company’s controller asks your opinion whether the items listed below should be considered as part of cash account and come up with adjusting entry to adjust the cash account. 1.   Customers’ check dated December 25, 2016, P25,000. 2.   Company’s check (P30,000) dated December 26, 2016 which was drawn in payment for merchandise purchased on that date but not delivered until January 3, 2017. This check was deducted in the cash balance. 3.    A check worth P196,000 from customer who paid the account net of the 2% discount. The company records the transaction as credit to Accounts Receivable for the proceeds. 4.   Cash in closed bank (Urban Bank), P95,000. 5.   Redemption fund, P100,000 6.   Sinking fund, P100,000. This will be used on March 1, 2017 to redeem the bonds payable. 7.   Metro Bank Checking Account No. 0004568, P210,000. 8.   RCBC Checking Account No. 0002347, P115,000. 9.   Overdraft in PNB Checking Account No. 00011256, P50,000. 10.   Company’s  check dated January 3, 2017 in payment of account, P50,000. This was recorded in the company’s disbursement ledger at December 31, 2016. 11.   Overdraft in RCBC Checking Account No. 0056791, P15,000. 12.   Postage stamps, P2,000. 13.   90-day Treasury Bills (purchase on November 1, 2016), P100,000 14.   Treasury Bills that matures on February 1, 2017, P50,000. 15.   Change fund, P10,000. 16.   Customers’ certified check,  P20,000. 17.   Company’s certified check, P50,000. (This was included in the cash disbursement for December).   QUESTION 1. IVIE COMPANY’S adjusted cash and c ash equivalents balance at December 31, 2016   PROBLEM 3 In connection with your examination of the financial statements of Nagbukel, Inc. for the year ended December 31, 2016, the December 31, 2016 balance in the Accounts Receivable control accounts is P788,000. The only entries in the Doubtful Accounts Expense account were:     A credit for P1,296 on December 2, 2016 because Company A remitted in full for the accounts charged off on October 31, 2016; and     A debit on December 31 for the amount of the credit to the Allowance for Doubtful Accounts. The Allowance for Doubtful Accounts schedule is follows: Debit Credit Balance  January 1, 2016 P14,632  October 31, 2016 Uncollectible accounts: Company A  –  P1,296 Company B  –  P3,280 Company C  –  P2,256 P6,032   8,600  December 31, 2016 P39,400   P48,000   An aging schedule of the accounts receivable as of December 31, 2016 is presented below:  Age Net debit balance  Amount to which the Allowance is to be adjusted after adjustments and corrections have been made 0 to 1 month P372,960  1 percent 1 to 3 months 307,280  2 percent 3 to 6 months 88,720  3 percent Over 6 months 24,000  Definitely uncollectible, P4,000; P8,000 is considered 50% uncollectible; the remainder is estimated to be 80% collectible. There is a credit balance in one account receivable (0 to 1 month) of P8,000; it represents an advance on a sales contract. Also, there is a credit balance in one of the 1 to 3 months account receivable of P2,000 for which merchandise will be accepted by the customer. The ledger accounts have not been closed as of December 31, 2016. The Accounts Receivable control account is not in agreement with the subsidiary ledger. The difference cannot be located, and you decided to adjust the control account to the sum of the subsidiaries after corrections are made. QUESTIONS: 1. How much is the adjusted balance of Accounts Receivable as of December 31, 2016? 2. How much is the adjusted balance of the Allowance for Doubtful Accounts as of December 31, 2016? 3. How much is the net adjustment to the Allowance for Doubtful Accounts? 4. How much is the Doubtful Accounts expense for the year 2016? 5. How much is the net adjustment to the Doubtful Accounts expense account?  PROBLEM 4 You are the accountant of AYALA MERCHANTS CORPORATION for the year 2017. The company is a dealer of appliances and has several branches in Metro Manila. Its main office is located in Makati City. You were given by the company controller the unadjusted balances of the items to be included in the company’s statement of financial position and statement of income as of and for the year ended December 31, 2017, findings as follows:  A cash count was conducted by your staff on January 7, 2018. The petty cash fund of P60,000 maintained by the company on an imprest basis relected a balance of P22,750. Unreplenished expenses totaled P37,250 of which P9,510 pertains to January 2018. You were furnished a copy of the company’s bank reconciliation statement with Chartered Bank as follows:  Balance per bank P277,994  Add: Deposit in transit 248,836 Bank debit memos 712,750 Returned check 63,000 Less: Outstanding checks (174,580) Book error (72,000) Balance per books P1,056,000 Your review of the reconciliation statement disclosed the following: 1.   Postdated checks totaling P107,400 were included as part of the deposit in transit. These represent collections from various customers whose accounts have been outstanding for less than three months. These checks were actually deposited on January 8, 2018. 2.   Included in the deposit in transit is a check from a customer for P63,000 which was returned by the bank on December 27, 2017 for insufficiency of funds. This account has been outstanding for over six months. The check was replaced by the customer on January 15, 2018. 3.   The bank debited the account of Ayala Merchants for P710,000 as payment of notes payable including interest of P10,000 due on December 26, 2017. This was not recorded as of year-end. 4.    A check was cleared by the bank as P30,900 but was recorded by the bookkeeper as P102,900. This was in payment of accounts payable. 5.   Bank service charges totaling P2,750 were not recorded. It is the company’s policy to provide allowance for doubtful accounts as  follows: Less than 3 months P2,500,960 1% 3 to 6 months 843,200 5% Over 6 months 274,500 10% Total P3,618,660  An analysis of the accounts receivable schedule showed that several long outstanding accounts for more than a year totaling P152,460 should be written-off. The company’s equity portfolio as of year-end showed the following: Total Shares Market Value Cost per Share Bacnotan Cement 7,000 P108,500 P16.00 Fil-Estate 10,000 195,000 19.75 Ionics 2,400 49,200 24.00 La Tondena 2,000 67,000 26.00 Selecta 8,000 31,600 1.20 Union Bank 1,600 50,880 27.50 P502,180 The securities are listed in the stock exchange. The company follows the fair value accounting. The note receivable amounting to P1,300,000 represents a loan granted to a subsidiary. This is covered by a promissory note with interest at 15% per annum dated November 1, 2017. No interest has been accrued on the note as of December 31, 2017. Questions: Determine the adjusted balances of the following:(Ignore tax implications) 1. Petty cash fund 2. Cash in bank 3. Trading securities 4. Accounts receivable 5. Allowance for doubtful accounts 6. Notes and interest receivable
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