Illustration 1
One month bank reconciliation
The books of Marianne Company shows a cash in bank balance of P79,440 as of July 31. Mariane’s
bank statement shows a cash balance for the company of P51,800. Additional information that
might be useful reconciling the disparity between the two balances follows:
a. A deposit of P16,000 was recorded by the bank on July 5, but it should have been recorded
for Ria Company rather than Marianne Company.
b. Petty cash of P8,500 was included in the cash balance
c. Check No. 6152 in payment of electric bill for P5,700 was correctly recorded by the bank but
was recorded in the cash disbursements journal of Marianne as P7,500.
d. The bank statement does not show receipts of P12,600 that were deposited on July 31.
e. The bank statement indicated a service charge of P3,000.
f. A check of P7,440 was returned marked NSF. The check had been included in the July 23
deposit. As of July 31, the check had not been re-deposited.
g. Proceeds from cash sales of P30,600 for July 18 were stolen. The Company expects to
recover this amount from the insurance company. The cash receipts were recorded in the
books, but no entry was made for the loss.
h. Interest of P2,400 accrued on funds that the bank had invested for Marianne for the month
of July.
i. Outstanding checks totaled P28,400 as of July 31.
j. The July 21 deposit included a check for P14,100 that had been returned on July 15 marked
NSF. Marianne had made no entry upon return of the check. The redeposit of the check on
July 21 was recorded in the cash receipts journal of Marianne as a collection on account.
REQUIRED:
1. Prepare a bank reconciliation as of July 31
2. Prepare the necessary adjusting journal entries
Illustration 2
One month bank reconciliation
You have gathered the following data in the preparation of bank reconciliation on December 31,
2020 for Armelia Company:
a.
b.
c.
d.
e.
f.
Balance per bank statement, P2,000,000.
Balance per books, P1,350,000
Bank service charge, P5,000
Outstanding checks P300,000
Deposit in transit P237,500
Proceeds of bank loan, December 1, discounted for 6 months at 12%, not recorded on
Armelia Company’s books, P470,000.
g. Customer’s check charged back by bank for lack of counter signature, P25,000.
h. Check of Joy Company charged by the bank against Armelia account, P75,000
i. Customer’s note collected by bank in favor of Armelia Company.
Face amount
200,000
Interest
20,000
Total
220,000
Less: Service Charge
2,500
217,500
j. Deposit of P50,000 incorrectly recorded by bank as, P5,000
k. Erroneous debit memo of December 28, to charge Armelia account with settlement of
bank loan, P100,000
l. Deposit of Joy Company credited to Armelia account, P150,000
REQUIRED:
1. Prepare bank reconciliation as of December 31, 2020?
2. Prepare adjusting journal entries except amortization of discount on loans payable.
Illustration 3
Computation of Deposit in Transit
The following data are available for the cash in Bank of Ellen Company for February of the current
year:
a. Deposit made by the company this February P120,000
b. Deposit in transit, Januar 31, P200,000
c. Customers check representing receipts in January amounting to P21,000 was erroneously
recorded by the company as P12,000
d. Check of the company in January amounting to P2,000 was erroneously recorded by the
company as P20,000
e. Deposits acknowledged by the bank in February P150,000
f. Erroneously bank charge in January 31, P13,000
g. Erroneously bank credit in February 28, P14,000
h. Customers note collected January 31, P10,000
i. Customers note collected February 28 P12,000
Compute for the following
a. Deposit in transit, Feb 28
b. Unadjusted book receipts in February
c. Unadjusted bank receipts in February
Illustration 4
Computation of Outstanding Checks
In the examination of the cash account of the Prudylyn Inc, the following information, relative to the
credits per books and debits per bank, were disclosed by the records of the company and its bank
statement with BPI:
Credits per books in February
Debits per bank statement in February
Check from customer in January amounting to P2,000 but
was taken up in the books as
Check issued to supplier in January amounting to P10,000 but
was taken up in the book as
Check issued to supplier in February amounting to P12,000
but was taken up in the book as
Check of the company recorded in the bank in January as P10,000
when the correct amount is
Amortization of PAG-IBIG housing loan automatically debited by the bank
on January 31, as per automatic debit agreement, but taken up in the
books of the depositor in February.
Amortization of PAG-IBIG housing loan automatically debited by the bank
on February 28, as per automatic debit agreement, but taken up in the
books of the depositor in March.
Erroneous bank credit – January
Erroneous bank charge – February
Deposits in January properly recorded by the company as P15,000
but was recorded in the bank as
Outstanding checks, January 31
Bank service charge for January
Bank service charge for February
REQUIRED:
Compute for the outstanding checks at the end of February
P200,000
150,000
20,000
1,000
21,000
15,000
15,000
15,000
18,000
10,000
51,000
15,000
1,000
2,000
Illustration 5
Computation of Proof of Cash
Data concerning the cash records of Lyndon Company for the months of September and October
2020 follow:
a.
b.
c.
d.
e.
f.
g.
Unadjusted book balance on September 30 amounted to P2,258,000
Total receipts per book in October, P1,400,000
Total disbursements per book in October P2,400,000
Unadjusted bank balance on September 30 amounted to P2,100,000
Total credits per bank in October amounted to P1,200,000
Total debits per bank in October amounted to P2,500,000
NSF checks on September 30 amounted to P60,000 while on October 31 amounted to
P40,000
h. Collection of accounts receivable not recorded by the company on September 30, P30,000
and P50,000 on October 31
i. Erroneous bank charge on September 30, P10,000 and P18,000 on October 31
j. Erroneous bank credit on September 30, P70,000 and P9,000 on October 31
k. Understatement of check in payment of rent payable on September 30, P90,000and
P120,000 on October 31.
l. Deposit in transit on September 30, P130,000
m. Outstanding checks on October 31, P30,000
REQUIRED: Based on the above data, answer the following questions:
1. How much is the deposit in transit October 31?
2. How much is the outstanding checks September 30?
3. How much is the adjusted cash in bank balance September 30?
4. How much is the adjusted cash receipts during October?
5. How much is the adjusted cash in bank balance October 31?
6. Provide the adjusting journal entries.