Sample Problems
BANK RECONCILIATION
PROBLEM 8-2
Apathy Company provided the following information:
Date
Dec. 2
Apathy Company
Check no. Withdrawal
18
104
20
101
22
106
27
29
29
103
29CM
31Service charge DM
Deposits
100,000
10,000
5,000
25,000
50,000
10,000
40,000
30,000
2,000
Balance
100,000
90,000
85,000
60,000
110,000
120,000
80,000
110,000
108,000
PROBLEM 8-2
Apathy Company provided the following information:
Dec. 1
21
27
31
Deposit
Deposit
Deposit
Deposit
FIRST BANK
100,000
Dec. 4 Check No.
50,000
6Check No.
10,000
8Check No.
80,000
8Check No.
10Check No.
14Check No.
28Check No.
101
102
103
104
105
106
107
5,000
15,000
40,000
10,000
30,000
25,000
50,000
PROBLEM 8-2
The credit made by the bank on December 29 represents the proceeds of a note
received from a customer which was given to the bank for collection by the
entity on December 26.
REQUIRED:
a.
b.
Prepare a bank reconciliation using adjusted balance
method.
Prepare the adjusting entries.
PROBLEM 8-2
Date
Dec. 2
Apathy Company
Check no.
Withdrawal
18
20
22
27
29
29
29 CM
31 Service charge DM
Dec. 1
21
27
31
Deposit
Deposit
Deposit
Deposit
104
101
106
Deposits
100,000
10,000
5,000
25,000
50,000
10,000
103
100,000
50,000
10,000
80,000
40,000
30,000
2,000
FIRST BANK
Dec. 4
6
8
8
10
14
28
Check No.
Check No.
Check No.
Check No.
Check No.
Check No.
Check No.
Balance
100,000
90,000
85,000
60,000
110,000
120,000
80,000
110,000
108,000
101
102
103
104
105
106
107
5,000
15,000
40,000
10,000
30,000
25,000
50,000
PROBLEM 8-2
Adjusting entries:
Dec. 31
Cash in bank
Notes receivable
#
Bank service charge
Cash in bank
#
30,000
30,000
2,000
2,000
PROBLEM 8-2
Apathy Company
Bank Reconciliation
December 31, 20A
Book balance
Add:
Credit memo from note collected
Total
Less:
Debit memo (service charge)
Adjusted book balance
Bank balance
Add:
Deposit in transit
Total
Less:
Outstanding checks
No. 102
No. 105
No. 107
Adjusted bank balance
65,000
30,000
95,000
(2,000)
93,000
108,000
80,000
188,000
15,000
30,000
50,000
(95,000)
93,000
PROBLEM 8-3
The following ledger account is a copy of the bank account in the
ledger of Sensible Company.
Dec
.
1
6
12
24
31
Balance
Deposit
Deposit
Deposit
Deposit
Second Bank
Dec
Check
100,000
.
1 no.
30,000
4
40,000
6
50,000
10
30,000
14
18
24
771
772
773
774
775
776
777
20,000
5,000
35,000
15,000
30,000
25,000
40,000
PROBLEM 8-3
The following bank statement was received from the Second Bank
by Sensible Company.
Date
Checks
Dec. 1 Balance
Check no.
1
4
6
12
12
Deposits
768
771
772
773
774
776
104
2
24
28 NSF Check
28 Service charge
10,000
20,000
5,000
35,000
15,000
52,000
8,000
10,000
5,000
Balance
130,000
30,000
40,000
50,000
45,000CM
PROBLEM 8-3
Other information
1. Sensible Company reconciled its bank balance on November 30 with two
checks, No. 768 for P10,000 and No. 770 for P20,000 outstanding.
2. Check no. 1042 was drawn by Sensitive Company.
The bank charged it in error to the account of Sensible Company.
3. Check No. 776 was incorrectly drawn for P52,000 in payment of an account.
The amount P25,000 was entered in the books of original entry.
4. The bank credit on December 28 represents the proceeds of a P50,000
note, less a collection fee of P5,000 collected by the bank and credited to
the account.
5. The NSF check was received from a customer in payment of an account.
Required:
a. Prepare a bank reconciliation statement on December 31.
b. Prepare adjusting entries on December 31.
PROBLEM 8-3
Dec. 1
6
12
24
31
Balance
Deposit
Deposit
Deposit
Deposit
Date
Dec. 1
100,000
30,000
40,000
50,000
30,000
Checks
Balance
Check no.
1
4
6
12
12
24
28 NSF Check
28 Service charge
Second Bank
Dec. 1 Check no. 771
4
772
6
773
10
774
14
775
18
776
24
777
Deposits
768
771
772
773
774
776
1042
10,000
20,000
5,000
35,000
15,000
52,000
8,000
10,000
5,000
30,000
40,000
50,000
45,000CM
20,000
5,000
35,000
15,000
30,000
25,000
40,000
Balance
130,000
PROBLEM 8-3
Sensible Company
Bank Reconciliation
December 31, 20A
Book balance
Add: Credit memo from note collected
Total
Less: Debit memo (service charge)
NSF Check
Book error (52,000-25,000)
Adjusted book balance
Bank balance
Add: Deposit in transit
Erroneous bank debit
Total
Less: Outstanding checks
No. 770
No. 775
No. 777
110,000
45,000
155,000
(5,000)
(10,000)
(27,000)
(42,000)
113,000
135,000
60,000
8,000
(20,000)
(30,000)
(40,000)
68,000
203,000
(90,000)
PROBLEM 8-3
Adjusting entries:
Dec. 31
Cash in bank
Bank service charge
Notes receivable
#
31
Bank service charge
Accounts receivable
Accounts payable
Cash in bank
#
45,000
5,000
50,000
5,000
10,000
27,000
42,000
PROBLEM 8-4
Xanthous Company provided the following bank
reconciliation on January 31 of the current year:
Bank balance
Add Deposit in transit
Total
Deduct Outstanding checks:
No. 114
115
116
Adjusted bank balance
300,000
600,000
900,000
240,000
160,000
60,000
460,000
440,000
All receipts of cash are deposited in the bank account. The bank
statement for the month of February is presented below:
Checks
240,000
200,000
900,000
160,000
THIRD BANK
Deposit
Balance forwarded
600,000
2,000,000
400,000
1,000,000
500,000
1,200,000
1,300,000
550,000
5,000SC
1,000,000
800,000
550,000
270,000CM
Date
Jan. 31
Feb. 1
3
5
7
9
10
13
16
21
23
24
27
28
Balance
300,000
660,000
2,660,000
2,460,000
1,960,000
1,800,000
2,800,000
2,300,000
3,500,000
4,800,000
4,250,000
4,245,000
3,795,000
3,265,000
PROBLEM 8-4
The following information was taken from
the credit memo of February 28:
Face of the note
Interest on the note
Maturity value of the note
Collection charge
Credit to your account
250,000
30,000
280,000
10,000
270,000
The following data were taken from
the cash journals of Xanthous
Cash Receipts Journal
Cash Disbursement Journal
Company:
Date
Debit Cash
Check No.
Credit Cash
Feb. 2
6
9
10
15
20
24
28
2,000,000
400,000
800,000
200,000
1,200,000
1,300,000
550,000
450,000
6,900,000
117
118
119
120
121
122
123
124
125
200,000
900,000
800,000
500,000
550,000
180,000
1,000,000
120,000
250,000
4,500,000
REQUIRED:
a.
b.
Prepare bank reconciliation on
February 28, showing the book
balance before and after adjustment.
Prepare journal entries to record the
adjustments that are indicated by
the bank reconciliation.
Xanthous Company
Bank Reconciliation
February 28, 20A
Balance per book
Add: CM for note collected
Total
Less: DM for service charge
Adjusted book balance
2,840,000
270,000
3,110,000
5,000
3,105,000
Balance per bank
Add: Deposit in transit
Total
Less: Outstanding checks
No. 116
122
124
125
Adjusted bank balance
3,265,000
450,000
3,715,000
60,000
180,000
120,000
250,000
610,000
3,105,000
ADJUSTING ENTRIES
a) Cash in bank
270,000
Bank service charge
10,000
Note Receivable
250,000
Interest Income
30,000
#
b) Bank Service charge
Cash in Bank
#
5,000
5,000
PROBLEM 8-5
Adept Company provided the following data for the month of December of the current
year:
Balance per book 5,000,000
Balance per bank 4,,450,000
Deposit in transit 3,000,000
Outstanding check 850,000
Bank service charge for the month of December50,000
Customer’s check returned by bank marked “NSF” 500,000
Customer’s note collected by bank
Face, P2,000,000; Interest, P200,000;
Collection fee, P50,0002,150,000
Required:
a. Prepare a bank reconciliation on December 31.
b. Prepare adjustments to correct the cash balance per book.
PROBLEM 8-5
Adept Company
Bank Reconciliation
December 31, 20A
Book balance
Add: Credit memo from note collected by bank
Total
Less: Debit memo (service charge)
NSF Check
Adjusted book balance
Bank balance
Add: Deposit in transit
Total
Less: Outstanding checks
Adjusted bank balance
5,000,000
2,150,000
7,150,000
(50,000)
(500,000)
(550,000)
6,600,000
4,450,000
3,000,000
7,450,000
(850,000)
6,600,000
ADJUSTING ENTRIES
a) Cash in bank
2,150,000
Bank service charge
50,000
Note Receivable
2,000,000
Interest Income
200,000
#
b) Bank Service charge
Accounts receivable
Cash in Bank
#
50,000
500,000
550,000
PROBLEM 8-6
Chivalry Company prepared the following bank reconciliation on
Book balance
1,405,000
March 31:
Add: March 31 deposit
Collection of note
Interest on note
Total
Less: Calvary Company's deposit
to our account
Bank service charge
Adjusted book balance
Bank balance
Add: Error on check No. 175
Total
Less:
Preauthorized payment for
light and water
NSF check
Outstanding checks
750,000
2,500,000
150,000
1,100,000
5,000
3,400,000
4,805,000
1,105,000
3,700,000
5,630,000
45,000
5,675,000
245,000
220,000
1,650,000
2,115,000
3,560,000
Check No. 175 was made for the proper amount of 249,000 in payment of
account. However it was entered in the cash disbursement journals as
294,000.
Chivalry Company authorized the bank to automatically pay its light and water
bills as submitted directly to the bank.
REQUIRED:
a.
b.
Prepare the corrected bank
reconciliation.
Prepare the adjusting entries on
March 31.
Chivalry Company
Bank Reconciliation
March 31, 20A
Book balance
Add: Collection of note
Interest on note
Book error on check no. 175
Total
Less: Bank service charge
Payment for light and water
NSF check
Adjusted book balance
Bank balance
Add: Deposit in transit
Total
Less: Bank error
Outstanding checks
Adjusted bank balance
1,405,000
2,500,000
150,000
45,000
5,000
245,000
220,000
2,695,000
4,100,000
470,000
3,630,000
5,630,000
750,000
6,380,000
1,100,000
1,650,000
2,750,000
3,630,000
ADJUSTING ENTRIES
a) Cash in bank
2,695,000
Note Receivable
2,500,000
Interest Income
150,000
Accounts payable
45,000
b) Bank Service charge
5,000
Light and water
245,000
Accounts receivable 220,000
Cash in Bank
470,000
PROBLEM 8-7
Zodiac Company provided the following information :
Balance per book, March 31
800,000
Cash Receipts for April
4,100,000
Cash Disbursements for April
3,800,000
Outstanding checks as of April 30
of which No. 1333 had been certified :
No.1331
40,000
No.1332
30,000
No.1333
50,000
No.1334
60,000
No.1335
10,000
April debit memos were :
For bank service charge
5,000
For NSF check
25,000
April Credit Memo for note collected
REQUIRED
Prepare a Bank Reconciliation on April 30 following the book to
bank approach and prepare adjusting entries .
Zodiac Company
Bank Reconciliation
March 31, 20A
Balance per book – April 30
Add:
Credit memo for note collected
Outstanding checks :
NO.1331
NO.1332
NO.1334
No.1335
1,100,000
60,000
40,000
30,000
60,000
10,000
TOTAL
Less:
Bank Service Charge
NSF Check
Undeposited collections
Adjusted balance per bank-April 30
5,000
25,000
270,000
140,000
1,300,000
(300,000)
1,000,000
ADJUSTING ENTRIES
a) Cash in Bank
Note Receivable
b) Bank Service charge
Accounts Receivable
Cash in Bank
60,000
60,000
5,000
25,000
30,000
Balance per bank statement
4,000,000
Balance per cash book
2,700,000
Outstanding checks
600,000
Deposit in transit
475,000
Service charge
10,000
Proceeds of bank loan, December 1 discounted for 6 months at
12%, not recorded on company books
940,000
Customer's check charged back by bank for absence of counter
signature
50,000
Deposit of 100,000 incorrectly recorded by bank as
10,000
Check of Rancid Company charged by bank against Rancor
Company account
150,000
Customer's note collected by bank in favor of Rancor Company.
Face
Interest
Total
Less: Collection fee
400,000
40,000
440,000
5,000
435,000
Erroneous debit memo of December 28, to charge company's
account with settlement of bank loan
200,000
Deposit of Rancid Company credited to Rancor account
300,000
REQUIRED
a.
b.
Prepare a bank reconciliation using the adjusted balance
approach.
Prepare adjusting entries on December 31.
RANCOR COMPANY
BANK RECONCILIATION
DECEMBER 31, 20A
Balance per book
Add: Proceeds of bank loan
Note collected by bank
2,700,000
940,000
435,000
Total
1,375,000
4,075,000
Less: Service charge
Customer’s check charged back
10,000
50,000
60,000
Adjusted book balance
4,015,000
Balance per bank
4,000,000
Add: Deposit in transit
Incorrect deposit
475,000
90,000
Erroneous bank charge
150,000
Erroneous debit memo
200,000
Total
Less: Outstanding checks
Erroneous bank credit
Adjusted bank balance
915,000
4,915,000
600,000
300,000
900,000
4,015,000
ADJUSTING ENTRIES
a) Cash in bank
1,375,000
Bank service charge
5,000
Interest expense (60,000 x 1/6)
10,000
Prepaid interest expense
50,000
Loan payable (940,000/94%)
1,000,000
Note receivable
400,000
Interest income
40,000
b) Bank service charge
Accounts receivable
Cash in bank
10,000
50,000
60,000
PROBLEM 8-12
Magnificent
Company
Cash balance per accounting
record provided the following data for the month of1,719,000
Cash
balance per bank statement
3,195,000
May:
Bank service charge
Debit memo for the cost of printed checks delivered
by the bank; the charge has not been recorded
in the accounting record
Outstanding checks
Deposit of May 30 not recorded by bank until June 1
Proceeds of a bank loan on May 30 not recorded
in the accounting record, net of interest of 30,000
Proceeds from a customer's promisory note,
principal amount P800,000 collected by the
bank not taken up in the book with interest
Check No. 1086 issued to a supplier entered
in the accounting record as P210,000 but deducted
in the bank statement at an erronous amount of
Stolen check lacking an authorized signature, deducted
from the entity's account by the bank in error
Customer's check returned by the bank marked NSF,
indicating that the customer's balance was not
adequate to cover the check; no entry has been made
in the accounting record to record the returned check
10,000
12,000
685,000
500,000
570,000
810,000
120,000
80,000
77,000
REQUIRED
a.
b.
Prepare a bank reconciliation statement.
Prepare adjusting entries.
Magnificent Company
Bank Reconciliation
May 31, 20A
Balance per book
Add:
Proceeds of bank loan
Proceeds of customer's note
Total
Less: Bank service charge
Debit memo for printed checks
NSF check
Adjusted book balance
Balance per bank
Add:
Deposit in transit
Stolen check deducted by bank in error
Total
Less: Outstanding checks
Bank error in recording
Adjusted bank balance
1,719,000
570,000
810,000
10,000
12,000
77,000
1,380,000
3,099,000
99,000
3,000,000
3,195,000
500,000
80,000
685,000
90,000
580,000
3,775,000
775,000
3,000,000
ADJUSTING ENTRIES(PLS EDIT)
a) Cash in bank
1,375,000
Bank service charge
5,000
Interest expense (60,000 x 1/6)
10,000
Prepaid interest expense
50,000
Loan payable (940,000/94%)
1,000,000
Note receivable
400,000
Interest income
40,000
b) Bank service charge
Accounts receivable
Cash in bank
10,000
50,000
60,000