Fundamentals of Financial Accounting
5th Edition
ISBN: 9780078025914
Author: Fred Phillips Associate Professor, Robert Libby, Patricia Libby
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 5.2SDC
(1)
To determine
To find: Whether Incorporation L has more balance of cash and cash equivalents than Incorporation HD in February 2014
(2)
To determine
To find: Whether the internal control over financial reporting of Incorporation L effective as per the reports of management and independent registered public accounting firm
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
The accountant of Mahoganny Corp. presented to you the following details of its subsidiary
ledger in relation to your audit of the company's accounts receivable balance as of December
31, 2014:
Invoice Date
Amount
Customer
Zulu Inc.
550,000
1,200,000
950,000
420,000
December 20
December 1
October 11
August 4
2018. The bookkeeper of the client provided you the following summarized data taken directly
You were assigned to audit the books of BACOLOD CORP. for the period ended December 31,
from its records:
Sales for cash
Total cash collected from charge customers
Cash purchases of merchandise
Credit purchases of merchandise
Expenses paid in cash
Accounts receivable, January 1
Accounts receivable, December 31
Bad debt expense
Recovery of bad debts
Allowance for doubtful accounts, January 1
Allowance for doubtful accounts, December 31
Accounts payable, January 1
Accounts payable, December 31
Merchandise inventory, January 1
Merchandise inventory, December 31
Accrued expenses, December 31
Prepaid expenses, December 31
Furniture and equipment, at cost
Interest received
Accrued interest income, January 1
Purchase returns
Purchase discounts
us the
CHAPTER 11-PROBLEM 8:
4. What is the net income for the year?
P7,500,000
2,550,000
5,100,000
1,200,000
2,250,000
750,000
1,200,000
100,000
25,000
125,000…
You obtained the following information on the current account of Par Company during your examination of its financial statements for the year ended December 31, 2021.
The bank statement on November 30, 2021 showed a balance of P 306,000 . Among the bank credits in November was customer’s noted for P 100,000 collected for the account of the company which the company recognized in December among its receipts. Included in the bank debits were costs of checkbooks amounting to P 1,200 and a P 40,000 check which was charged by the bank in error against Par Company account. Also in November, you ascertained that there were deposits in transit amounting to P 80,000 and outstanding checks totaling P 170,000.
The bank statement for the month of December showed total credits of P 416,000 and total charges of P 204,000. The company’s books for December showed total debits of P 735,600 , total credits of P 407,200 and a balance of P485,600. Bank debit memos for December were: No. 121 for service…
Chapter 5 Solutions
Fundamentals of Financial Accounting
Ch. 5 - Prob. 1QCh. 5 - Prob. 2QCh. 5 - Prob. 3QCh. 5 - Prob. 4QCh. 5 - Prob. 5QCh. 5 - What aspect(s) of the Sarbanes-Oxley Act might...Ch. 5 - Prob. 7QCh. 5 - What are the five components of an internal...Ch. 5 - Prob. 9QCh. 5 - Why is it a good idea to assign each task to only...
Ch. 5 - Prob. 11QCh. 5 - Prob. 12QCh. 5 - Prob. 13QCh. 5 - Prob. 14QCh. 5 - Prob. 15QCh. 5 - Prob. 16QCh. 5 - What is the primary internal control goal for cash...Ch. 5 - Prob. 18QCh. 5 - Prob. 19QCh. 5 - Prob. 20QCh. 5 - Prob. 21QCh. 5 - Prob. 22QCh. 5 - Prob. 23QCh. 5 - Prob. 24QCh. 5 - Prob. 1MCCh. 5 - Prob. 2MCCh. 5 - Prob. 3MCCh. 5 - Prob. 4MCCh. 5 - Which of the following internal control principles...Ch. 5 - Prob. 6MCCh. 5 - Prob. 7MCCh. 5 - Prob. 8MCCh. 5 - Prob. 9MCCh. 5 - Prob. 10MCCh. 5 - Prob. 5.1MECh. 5 - Prob. 5.2MECh. 5 - Prob. 5.3MECh. 5 - Prob. 5.4MECh. 5 - Prob. 5.5MECh. 5 - Prob. 5.6MECh. 5 - Prob. 5.7MECh. 5 - Prob. 5.8MECh. 5 - Prob. 5.9MECh. 5 - Prob. 5.10MECh. 5 - Prob. 5.11MECh. 5 - Prob. 5.12MECh. 5 - Prob. 5.13MECh. 5 - Prob. 5.14MECh. 5 - Prob. 5.15MECh. 5 - Prob. 5.16MECh. 5 - Identifying Internal Control Principle and...Ch. 5 - Prob. 5.2ECh. 5 - Prob. 5.3ECh. 5 - Prob. 5.4ECh. 5 - Prob. 5.5ECh. 5 - Prob. 5.6ECh. 5 - Prob. 5.7ECh. 5 - Prob. 5.8ECh. 5 - Prob. 5.9ECh. 5 - Prob. 5.10ECh. 5 - Prob. 5.1CPCh. 5 - Prob. 5.2CPCh. 5 - Prob. 5.3CPCh. 5 - Prob. 5.4CPCh. 5 - Prob. 5.1PACh. 5 - Prob. 5.2PACh. 5 - Prob. 5.3PACh. 5 - Prob. 5.4PACh. 5 - Prob. 5.1PBCh. 5 - Prob. 5.2PBCh. 5 - Prob. 5.3PBCh. 5 - Prob. 5.4PBCh. 5 - Recording Transactions and Adjustments,...Ch. 5 - Prob. 5.1SDCCh. 5 - Prob. 5.2SDCCh. 5 - Ethical Decision Making: A Real-Life Example When...Ch. 5 - Ethical Decision Making: A Mini-Case You are an...Ch. 5 - Accounting for Cash Receipts, Purchases, and Cash...
Knowledge Booster
Similar questions
- Entity Cake is preparing its February 28, 2023 bank reconciliation statement. The following information was determined: • Cash balance per accounting books, Feb. 28, 2023- P260,000 • Cash balance per bank statement, Feb. 28, 2023- P205,000 When investigating the difference, the accountant determined the following: a. A customer deposited P30,000 to Entity Cake's bank account as payment for an account receivable. This is not yet recorded in the books of accounts. b. A P102,500 check deposited by Entity Cake during the month is not yet credited Cake's account. Entity c. A check drawn in the amount of P22,500 is not yet presented to the bank for payment. d. The bank returned a check deposit amounting to P5,000 because of insufficiency in the funds of the drawer. The check was received from a customer as payment for accounts receivable. How much is the adjusted cash balance on February 28, 2023?arrow_forwardPROBLEM 1: You obtained the following information on the current account of BUGOY CORP. During your examination of its financial statements for the year ended December 31, 2021. The bank statement on November 30, 2021 showed a balance of P918,000. Among the bank credits in November was customer's note for P300,000 collected for the account of the company which the company recognized in December among its receipts. Included in the bank debits were cost of checkbooks amounting to P3,600 and a P120,000 check which was charged by the bank in error against Bugoy's account. Also in November you ascertained that there were deposits in transit amounting to P240,000 and outstanding checks totaling P510,000. The bank statement for the month of December showed total credits of P1,248,000 and total charges of P612,000. The Company's books for December showed total debits of P2,206,800, total credits of P1,221,600 and a balance of P1,456,800. Bank debit memos for December were: No. 121 for service…arrow_forwardThe accountant of Hiddleston Corporation presented to you the following details of its subsidiary ledger in relation to your audit of the company’s accounts receivable balance as of December 31, 2021: Customer Invoice Date Amount Zulu Inc. December 20 550,000 December 1 1,200,000 October 11 950,000 August 4 420,000 Whiskey Co. November 20 2,000,000 September 4 900,000 August 2 500,000 Uniform Inc. December 10 1,750,000 October 4 600,000 July 5 500,000 Uniform Inc. September 9…arrow_forward
- Accompanying a bank statement for Borden Company is a credit memo for $15,225 representing the principal ($15,000) and interest ($225) on a note that had been collected by the bank. The company had been notified by the bank at the time of the collection but had made no entries. Journalize the entry that should be made by the company to bring the accounting records up to date. If an amount box does not require an entry, leave it blank. UDarrow_forwardAccompanying a bank statement for Borden Company is a credit memo for $24,360 representing the principal ($24,000) and interest ($360) on a note that had been collected by the bank. The company had been notified by the bank at the time of the collection but had made no entries. Journalize the entry that should be made by the company to bring the accounting records up to date. If an amount box does not require an entry, leave it blank. blank Account Debit Credit blankarrow_forwardWonderland Inc. has introduced new accounting software and have been facing lot of challengeswith reconciling its bank statement and have asked you to help them to identify the differencesbetween bank balance and the bank statement.Wonderland bank with DB Bank (DB) and is wondering if bank statement reflect accurateinformation.Following are the details for the month of July 2021 Balance as per DB as at July 31st was $103,220 Cheque amounting to $5,579 was issued to Carry over Corp on 28th July which was notpresented to the bank Cheque amounting to $2,425 was received on 30th July 2021 which was deposited in thebank on July 31st, cashier confirmed that the cheque was deposited before the closinghours but bank statement did not have deposit of this amount Surex Ltd issued the cheque amounting to $1,998 and $3,593 that were deposited on July31st. cheque were not recorded by the bank The below two cheques were issued to Matra Inc. but were still outstandingChq Date Issued Amount10009…arrow_forward
- In the process of your examination of the financial statements of the Malu-oy Company for the year ended December 31, 20X6, you obtained the following data on its current account. The bank statement on November 30, 20X6 showed a balance of P76,500. Among the bank credits in November was a customer’s note for P25,000 collected for the account of the company which the company recognized in December among its receipts. Included on the bank debits were cost of checkbooks amounting to P300 and a P10,000 check which was charged by the bank in error against Malu-oy Company account. Also in November, you ascertained that there were deposits in transit amounting to P20,000 and outstanding checks totaling P42,500. The bank statement for the month of December showed total credit of P104,000 and total charges of P51,000. The company’s books for December showed total receipts of P183,900, disbursements of P101,800 and a balance of P121,400. Bank debit memos for December were: No. 14334 for service…arrow_forwardAt 31 March 2015, the balance of the Cash account according to the records of Harmony Company was $14,432. The 31 March bank statement showed a balance of $17,596. You are going to prepare the bank reconciliation of Harmony Company at 31 March 2015, using the following supplementary information:(1) Service charge by bank, $100.(2) The bank has collected a total of $10,100 and directly credited to Harmony, which represents the principal and interest owed by Peace Company. Interest amounted to $200.(3) A check for $180 drawn by a customer, Charlotte Lava, but deducted from Harmony’s account by the bank and returned with the notation “NSF.”(4) Harmony’s records showed that it has made a total deposit of $32,088 during March 2015, but according to the bank statement it only showed deposits of $18,544. No deposit-in-transit is carried forwarded from February 2015.(5) Outstanding checks: no. 18120, $280; no. 18121, $1,864; no. 18127, $614; no. 18134, $4,400.(6) Harmony’s check no. 18114,…arrow_forwardAccompanying a bank statement for Santee Company is a credit memo for $15,120 representing the principal ($14,000) and interest ($1,120) on a note that had been collected by the bank. The company had been notified by the bank at the time of the collection but had made no entries. Required: On March 1, journalize the entry that should be made by the company to bring the accounting records up to date. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Chart of Accounts CHART OF ACCOUNTS Santee Company General Ledger ASSETS 110 Cash 111 Petty Cash 120 Accounts Receivable 131 Notes Receivable 141 Merchandise Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 181 Land 191…arrow_forward
- The following information is for Dylex Corporation: a Balance per the bank statement dated July 31, 2014 is $29,050. b. Balance of the Cash account on the company books as of July 31, 2014 is $15,555. c. Bank service charges for the month amount to $30. d. Included with the bank statement was a $25 credit memorandum for interest eamed on the bank account during the month. e. Bank deposit on July 31, 2014 for $1,400 does not appear on the bank statement 1. Cheque #391, for office supplies in the amount of $924, was recorded in the Cash Disbursements Journal incorrectly as $9.924 g. Included with the bank statement was an NSF cheque for $700 that had been received from a customer in payment of his account h. Cheques written that had not cleared the bank by July 31, 2014 were #412: $1,400 #401 $1,450 # 402 $1,200 #400 $1,350 #415 $1,200 Prepare a bank reconciliation statement as of July 31, 2014, as well as the necessary adjusting journal entries. Enter the transaction letter as the…arrow_forwardAccompanying a bank statement for Santee Company is a credit memo for $15,120 representing the principal ($14,000) and interest ($1,120) on a note that had been collected by the bank. The company had been notified by the bank at the time of the collection but had made no entries. Journalize the entry that should be made by the company to bring the accounting records up to date.arrow_forwardThe controller for Blossom Co. is attempting to determine the amount of cash to be reported on its December 31, 2017, balance sheet. The following information is provided. 1. Blossom received a post-dated check from a customer. The check is dated January 1, 2018, in the amount of $24,000. The company has a certificate of deposit of $80,000. The CD matures 120 days after its November 1, 2017 date of 2. origination. Blossom Co. holds a commercial savings account of $400,000 and a commercial checking account balance of $1,000,000 at First National Bank of Alexander. In addition, a bank overdraft of $70,000 existed at year-end in a separate account 3. that the company uses to deposit cash receipts at First National Bank of Alexander. 4. A separate cash fund in the amount of $1,375,000 is set aside for the expansion of the company's New Jersey factory. On December 21, 2017, Blossom Co. purchased $700,000 of commercial paper from Voight, Inc. The commercial paper matures January 14, 2018. 5.…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Financial AccountingAccountingISBN:9781305088436Author:Carl Warren, Jim Reeve, Jonathan DuchacPublisher:Cengage Learning
Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Financial Accounting
Accounting
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Cengage Learning
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning