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Bank Reconciliation Guide

1) The document provides bank reconciliation information for Fabulous Company for July 1 and July 31. 2) On July 1, the balance per books was $1,270,000 while the balance per bank was $1,720,000. Outstanding checks totaled $950,000. 3) On July 31, the adjusted balance per books was $470,000 and the adjusted balance per bank was $2,700,000. Deposits in transit were $400,000 and outstanding checks were $1,150,000. 4) Adjusting entries on July 31 included recording a $1,500,000 note collected and a $20,000 bank service charge.

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Nika Bautista
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11K views3 pages

Bank Reconciliation Guide

1) The document provides bank reconciliation information for Fabulous Company for July 1 and July 31. 2) On July 1, the balance per books was $1,270,000 while the balance per bank was $1,720,000. Outstanding checks totaled $950,000. 3) On July 31, the adjusted balance per books was $470,000 and the adjusted balance per bank was $2,700,000. Deposits in transit were $400,000 and outstanding checks were $1,150,000. 4) Adjusting entries on July 31 included recording a $1,500,000 note collected and a $20,000 bank service charge.

Uploaded by

Nika Bautista
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as XLSX, PDF, TXT or read online on Scribd
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Problem 3-3 A).

1-Jul
Fabulous Company provided the following data concerning Ajusted Book Balance
cash on July 31:
Checks Drawn: Bank Statement Balance per Bank
No. 101 600,000.00 Balance, July 31 2,700,000.00 Add: Deposit in Transit
No. 102 700,000.00 Charges: Total
No. 103 300,000.00 Checks paid 4,000,000.00 Less: Outstanding Checks
No. 104 400,000.00 Service Charge 20,000.00 Adjusted Bank Balance
No. 105 450,000.00 Credits:
No. 106 600,000.00 Deposits 3,500,000.00 31-Jul
No. 107 650,000.00 Note Collected 1,500,000.00 Balance per Book
No. 108 500,000.00 Add: Note Collected by the Bank
4,200,000.00 Total
Less: Service Charge
1). Balance of cash per book on July 1, P1,270,000. Cash receipts per cash book Adjusted Book Balance
for the month of July P3,400,000.
2). Checks paid by bank include all checks issued during the month of July except Balance per Bank
No. 107 and No. 108 Add: Deposit in Transit
3). On July 31 cash received but not yet deposited in bank, P400,000. Total
Less: Outstanding Checks
Required: Adjusted Bank Balance
A. Prepare bank reconciliation on July 1 and July 31
B. Prepare adjusting entries on July 31
Computations:
1,270,000.00 Balance per book - beginning 1,270,000.00
Add: Book Debits 3,400,000.00
1,720,000.00 Total: 4,670,000.00
500,000.00 Less: Book Credits 4,200,000.00
2,220,000.00 Balance per book - ending 470,000.00 31-Jul
950,000.00
1,270,000.00 Balance per bank - beginning 1,720,000.00
Add: Bank Credits 3,500,000.00
Note Collected 1,500,000.00
470,000.00 Total 5,000,000.00
1,500,000.00 Less: Bank Debits 4,020,000.00
1,970,000.00 Balance per bank - ending 2,700,000.00 31-Jul
20,000.00
1,950,000.00 Depsit in Transit - Beg. 500,000.00
Add: Cash Receipts deposited 3,400,000.00
2,700,000.00 Total 3,900,000.00
400,000.00 Less: Deposit acknowledged by bank 3,500,000.00
3,100,000.00 Deposit in Transit - Ending 400,000.00 31-Jul
1,150,000.00
1,950,000.00 Outstanding Checks - Beg. 950,000.00
Add: Checks drawn by the depositor 4,200,000.00
Total
Less: Checks paid by bank 4,000,000.00
Outstanding Checks - End. 1,150,000.00 31-Jul
B. Prepare adjusting entries on July 31

a). Cash in Bank 1,500,000.00


Notes Receivable 1,500,000.00
To record notes collected

b). Bank Service Charge 20,000.00


Cash in Bank 20,000.00
To record bank service charge

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