Reference no: EM132925184

Question - The bank statement for the current account of IAN Co. showed a December 31, 2018 balance of P585,284. Information that might be useful in preparing a bank reconciliation is as follows:

Outstanding checks were P52,810.

The December 31, 2018, cash receipts of P23,000 were not deposited in the bank until January 2, 2019.

One check written in payment of rent P8,940 was correctly recorded by the bank but was recorded by Ian Co. as a P9,840 disbursement.

In accordance with prior authorization, the bank withdrew P18,000 directly from the current account as payment on a mortgage note payable. The interest portion of the payment was P14,000. Ian Co., has made no entry to record the automatic payment.

Bank service charge of P740 were listed on the bank statement.

A deposit of P35,000 was recorded by the bank on December 12 but it did not belong to Ian Co.

The bank statement included a charge of P3,400 for a not-sufficient fund check.

The company will seek payment from the customer.

Ian Co., maintains an P8,000 petty cash fund that was appropriately reimbursed at the end of December.

According to the instructions from Ian Co., on December 30, the bank withdrew P40,000 from the account and purchased treasury bills for Ian Co. The company recorded the transaction in its books on December 31 when it received notice from the bank. Half of the treasury bills mature in three months and the other half in six months.

1. What is the cash in bank per books on December 31, 2018?

a. P549,714

b. P543,514

c. P534,914

d. P541,714

2. What is the adjusted cash in bank balance on December 31, 2018?

a. P520,474

b. P527,274

c. P518,674

d. P520,154

3. What amount of cash and cash equivalents should be shown under current assets on December 31, 2018?

a. P928,474

b. P728,474

c. P720,474

d. P735,274