 From the following information, prepare the following:

a) A four-column reconciliation that would end at adjusted balances.

b) Adjusting journal entries as of December 31, 2019.

Reconciling items: November 30 December 31

Deposits in transit P10,400 ?
Outstanding checks 16,014 ?
NSF check 1,052 P1,400
Customer’s note collected by bank 3,000 8,554
Bank service charges 100 130
Erroneous bank debits 1,200 1,800
Erroneous bank credits 2,000 6,000

Book balances ? 332,472

Bank balances 261,120 ?

December transactions: Books Bank

Receipts P302,460 P299,902
Disbursements 222,846 220,196

Solution:
November 30 Receipts Disbursements December 31
Books balances 252,858 302,460 222,846 332,472
NSF checks – 11/30 (1,052) (1,052)
12/31 1,400 (1400)
Notes collected – 11/30 3,000 (3,000)
12/31 8,554 8,554
Bank charges – 11/30 (100) (100)
12/31 130 (130)
Adjusted balances 254,706 308,014 223,224 339,496

Deposits in transit – Nov. 30 P10,400

Add: Deposits to be recognized by the bank
Book receipts 302,460
Less: Notes collected in Nov. (3,000) 299,460
Less: Deposits recognized by the bank
Bank receipts 299,902
Less: Notes collected in Dec (not deposit) (8,554)
Nov. Erroneous bank debits (credited in Dec) (1200)
Dec. Erroneous bank credits (not deposit) (6,000) (284,148)
Deposits in transit – Dec. 31 25,712

Outstanding checks – Nov. 30 P16,014

Add: Check payments to be recognized by the bank:
Book disbursements 222,846
Less: Nov. NSF checks (1,052)
Nov. Bank charges (100) 221,694
Less: Payments recognized by the bank:
Bank disbursements 220,196
Less: Dec. NSF check (1,400)
Dec. bank charges (130)
Dec. erroneous bank debits (1,800)
Nov. erroneous bank credits (2,000) (214,866)
Outstanding checks – Dec. 31 22, 842

November 30 Receipts Disbursements December 31

ThisBank balances
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 DIT – Nov. 30 10,400 (10,400)
- Dec. 31 25,712 25,712
OC – Nov. 30 (16,014) (16,014)
- Dec. 31 22,842 (22,842)
Erroneous bank debits 1,200 (1,200)
– Nov. 30
- Dec. 31 (1,800) 1,800
Erroneous bank credits (2,000) (2,000)
– Nov. 30
- Dec. 31 (6,000) (6,000)
Adjusted balances 254,706 308,014 223,224 339,496

 The cash in bank account of Sung, Inc. for April showed an ending balance of P129,298. Deposits in transit
on April 30 was P18,200. Outstanding checks as of April 30 were P59,435, including a P5,000 check which
the bank had certified on April 27. During the month of April, the bank charged back NSF checks in the
amount of P3,435 of which P1,835 had been redeposited on April 20. On April 23, the bank charged Sung’s
account for a P2,200 items which should have been charged against Song, Inc., the error was not detected by
the bank. During April, the proceeds from notes collected by the bank for Sung was P7,548 and bank charges
for this services was P18.

How much is the unadjusted balance per bank on April 30? ____________________
Answer: 169,263

 EASY Company deposits all receipts and makes all payments by check. The following information is
available from the cash records:
May 31 Bank Reconciliation
Balance per bank P262,460
Add: Deposits in transit 21,000
Less: Outstanding checks (38,000)
Balance per books P245,460

Month of June Results Per Bank Per Books

Balance June 30 P279,950 P303,550
June deposits 107,840 158,890
June checks 111,000 100,800
June note collected (not included in June deposits) 30,000
June bank service charge 350
June NSF check of a customer returned by the bank
(recorded by bank as a charge) 9,000

1. The deposits in transit as of June 30 is _____________________.

Answer: P72,050
2. The outstanding checks as of June 30 is _____________________.
Answer: P27,800

 Below is the bank reconciliation of ASSUMED Company for the month of October.
Balance per bank, Oct. 31 P75,000
Add: Deposits in transit 12,000
Less: Outstanding checks (14,000)
Bank credit recorded in error (5,000)
Cash balance per books, Oct. 31 P68,000

The bank statement for the month of November contains the following data:
Total deposits P55,000
Total charges,
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 All outstanding checks on May 31, including the bank credit, were cleared in the bank in November. There were
outstanding checks of P15,000 and deposits in transit of P19,000 on November 30.

Compute the following:

1. Cash receipts per books in November Answer: P62,000

2. Cash disbursements per books in November Answer: P39,800
3. Cash balance per books as of November 30 Answer: P90,200
4. Cash balance as adjusted as of November 30 Answer: P86,000

 Pilot Company prepared the following bank reconciliation on September 30

Balance per bank P9,800,000
Deposits in transit 400,000
Outstanding checks (1,400,000)
Balance per books 8,800,000

There were total deposits of P6,500,000 and charges for disbursements of P9,000,000 for October per bank
statement. All reconciliation items on September 30 cleared the bank on October 31. Deposits in transit totaled
P600,000 and checks outstanding amounted to P1,000,000 on October 31.

Required: Compute for the cash receipts and cash disbursements per books in October.

Answer: Receipts = P6,700,000 Disbursements = P8,600,000

 The bank statement for the checking account of Rolls Corporation showed a December 31, 2019 balance
of P1,463,212. Information that might be useful in preparing a bank reconciliation is as follows:

a. Outstanding checks were P132,025

b. The December 31, 2019 cash receipts of P57,500 were not deposited in the bank until
January 2, 2020
c. One check written in payment of rent for P24,600 was correctly recorded by the bank but was
recorded by Rolls as P26,400 disbursement
d. In accordance with prior authorization, the bank withdrew P45,000 directly from the checking
account as payment on mortgage note payable. The interest portion of that payment was P35,000.
Rolls has made no entry to record the automatic payment
e. Bank service charges of P1,400 were listed on the bank statement
f. A deposit of P87,500 was recorded by the bank on December13, but it did not belong to Rolls
Corporation. The deposit should have been made to the checking account of Trolls Corp.
g. The bank statement included a charge of P8,500 for an NSF check. The check was returned with
the bank statement and the company will seek payment form the customer
h. Rolls maintains a P20,000 petty cash fund that was appropriately reimbursed at the end of
December
i. According to instruction for Rolls on December 30, the bank withdrew P1,000,000 from the
account and purchased Treasury Bills for Rolls. Rolls recorded the transaction in its books on
December 31 when it received notice from the bank. Half of the treasury bills mature in two months
and the other half in six months.

1. What is the cash in bank balance per books on December 31, 2019? P1,354,287
2. What is the corrected cash in bank balance on December 31, 2019? P1,301,187
3. What amount of cash and cash equivalents should be reported in
thecurrent assets section of the balance sheet on December 31, 2019?
P1,821,187

 The Cotton Corp.’s statement of financial position as of December 31, 2019 shown a cash and cash equivalents
balance amounting to P12,000,000 which included the following:
a. Customer’s check for P100,000 returned by bank on December 29, 2019 due to insufficient fund but
subsequently redeposited and cleared by the bank on January 3, 2020.
b. Customer’s check for P200,000 dated January 2, 2020, received on December 29, 2019.
c. Cash earmarked for bonds payable due on June 30, 2020, P5,000,000.
d. P1,000,000 of compensating balance against short term borrowing arrangement at December 31, 2019.
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 e. Check written and dated December 29, 2019 and delivered to payee on January 2, 2020, P500,000.
f. Check written on December 27, 2019, dated January 2, 2020, delivered to payee on December 29,
2019, P800,000
g. One-year certificate of deposit, P2,000,000.

Required: Determine the adjusted amount of cash and cash equivalents that should be presented in Cotton Corp.’s
statement of financial position.
Answer: P8,700,000

1. If the cash balance in a company’s bank statement is more than the correct cash balance and neither the
company nor the bank has made any errors, there must be
a. Deposits credited by the bank but not yet recorded by the company
b. Outstanding checks
c. Bank charges not yet recorded by the company
d. Deposits in transit

Answer: B

2. If the cash balance shown in a company’s accounting records is more than the correct cash balance and
neither the company nor the bank has made any errors, there must be
a. Deposits credited by the bank but not yet recorded by the company
b. Deposits in transit
c. Outstanding checks
d. Bank charges not yet recorded by the company

Answer: D

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