Three-dated bank reconciliation
The client, Noel Corporation, obtained bank statements for November 30 and December 31,
2015 and reconciled the balanced. You obtained directly the statements of January 12,2016 and
obtained the necessary confirmation. You have found that there are no errors in addition or
subtraction in the client’s books.
11/30/15 12/31/15
Balance, bank statement P344,420 P275,020
Balance, company records 271,260 226,010
Deposits in transits 35,000 ?
Outstanding checks 88,240 ?
12/1-31/15 1/1-12/16
Receipts, cash records P963,230 P292,500
Credits, bank statement 941,010 321,490
Disbursements, cash records 1,008,480 177,570
Charges, bank statement 1,010,410 230,180
The following information also was obtained:
a) Check no. 804 for P340 cleared by the bank in December as P1,340. This was found in
proving the bank statement. The bank made the correction on January 8, 2016.
b) A note of P20,000, sent to the bank for collection on November 15,2015, was collected
and credited to the account on November 28, 2015, net of a collection fee of P80. The
note was recorded in the cash receipts on December 21, 2015, at which date the
collection fee was entered as a disbursement.
c) The client records returned checks in red in the cash receipts journal. The checks listed in
the table were returned by the bank.
Amount Returned Recorded Redeposited
Co. A P3,270 12/6/15 No entries 12/8/15
Co. B P6,730 12/27/15 1/3/16 1/15/16
d) Two payroll checks for employee’s vactions totalling P5,500 were drawn on January 3,
2016, and cleared the bank on January 8,2016. Those checks were not entered in the
clients records because semi-monthly payroll summaries are entered only on the 15th and
the last day of each month.
REQUIRED:
1. Compute for the following:
a. Deposits in transit as of December 31, 2015
b. Outstanding checks as of December 31,2015
c. Deposits in transits as of January 12, 2016
d. Outstanding checks as of January 12,2016
2. Prepare a 4-column bank reconciliation for the month of December 2015 and for the
period January 1 to 12, 2016 using the adjusted balance method.
SOLUTION:
Requirement 1.a
Deposits in transit, Nov. 35,00
30 0
Add collections in
December:
December book 963,2
receipts 30
Customers' note collected by bank in (20,0 943,23
Nov. 00) 0
978,23
Total 0
Less deposits credited by the bank in
December:
December bank 941,0
receipts 10
(3,2 937,74
NSF check redeposited (Customer A) 70) 0
Deposits in transit, Dec. 40,49
31 0
Requirement 1.b
Outstanding checks, 88,24
Nov. 30 0
Add checks issued in December:
1,008,4
December book disbursements 80
( 1,008,40
Collection fee for note collected in Nov. 80) 0
1,096,64
Total 0
Less checks paid by the bank in December:
1,010,4
December bank disbursements 10
Bank error in check payment (P1,340 - (1,0
P340) 00)
NSF check - (3,2
Customer A 70)
NSF check - (6,7 999,41
Customer B 30) 0
Outstanding checks, 97,23
Dec. 31 0
Requirement 1.c
Deposits in transit, Dec. 31 (see Requirement 40,49
1.a) 0
Add collections, Jan. 1-
12:
Jan. 1-12 book 292,5
receipts 00
NSF check - 6,73 299,23
Customer B 0 0
339,72
Total 0
Less deposits credited by the bank, Jan. 1-12:
Jan. 1-12 bank 321,4
receipts 90
Correction of error in check payment in (1,0 320,49
Dec. 00) 0
Deposits in transit, Jan. 19,23
12 0
Requirement 1.d
Outstanding checks, Dec. 31 (see 97,23
Requirement 1.b) 0
Add checks issued, Jan. 1-12:
177,5
Jan. 1-12 book disbursements 70
5,50 183,07
Unrecorded payroll checks 0 0
280,30
Total 0
230,18
Less checks paid by the bank, Jan. 1-12: 0
Outstanding checks, Jan. 50,12
12 0
December January 1-12
Nov. Receipt Receipt
30 s Disb Dec. 31 s Disb Jan. 12
Unadjusted bank 344,42 941,0 1,010,4 275,02 321,4 230,18 366,3
balances 0 10 10 0 90 0 30
Deposits in transit:
35,00 (35,0 (40,4
eginning of period 0 00) 90)
40,49 40,49 19,2 19,2
End of period 0 0 30 30
Outstanding checks:
(88,24 (88,2 (97,23
Beginning of period 0) 40) 0)
97,2 (97,23 50,12 (50,1
End of period 30 0) 0 20)
Bank error in check (1,0 1,00 (1,00
payment 00) 0 0)
NSF check redeposited (Customer (3,27 (3,2
A) 0) 70)
291,18 943,2 1,015,1 219,28 299,2 183,07 335,4
Adjusted bank balances 0 30 30 0 30 0 40
Unadjusted book 271,26 963,2 1,008,4 226,01 292,5 177,57 340,9
balances 0 30 80 0 00 0 40
Note collected by bank 19,92 (20,0 (
in Nov. 0 00) 80)
6,73 (6,73 6,73
NSF check not redeposited (Customer B) 0 0) 0
Unrecorded payroll in 5,50 (5,50
Jan. 0 0)
291,18 943,2 1,015,1 219,28 299,2 183,07 335,4
Adjusted book balances 0 30 30 0 30 0 40
