Since 1977

FAR OCAMPO/OCAMPO
FAR.2917 - Bank Reconciliation

DISCUSSION PROBLEMS
1. Bank reconciliation Assuming no errors were made, compute the cash
a. Explains the difference between the bank balance balance per books on June 30 before any reconciliation
and the balance shown in the depositor’s records. adjustments.
b. Can help identify cash errors or irregularities that a. P11,404 c. P10,460
have occurred in accounting for cash, either by the b. P12,348 d. P10,220
entity or the bank.
c. Should be prepared by an individual who neither
handles nor records cash. 7. The cash in bank account of S-mart, Inc. for April
d. All the statements are correct. showed an ending balance of P129,298. Deposits in
transit on April 30 was P18,200. Outstanding checks
2. If the cash balance in a company’s bank statement is as of April 30, were P59,435, including a P5,000 check
more than the correct cash balance and neither the which the bank had certified on April 27. During the
company nor the bank has made any errors, there month of April, the bank charged back NSF checks in
must be the amount of P3,435 of which P1,835 had been
a. Deposits credited by the bank but not yet recorded redeposited by April 20. On April 23, the bank charged
by the company S-Mart’s account for a P2,200 items which should have
b. Outstanding checks been charged against K-mart, Inc., the error was not
c. Bank charges not yet recorded by the company detected by the bank. During April, the proceeds from
d. Deposits in transit notes collected by the bank for S-Mart, Inc. was
P7,548 and bank charges for this services was P18.
3. If the cash balance shown in a company’s accounting
How much is the unadjusted balance per bank on April
records is more than the correct cash balance and
30?
neither the company nor the bank has made any
a. P95,263 c. P173,663
errors, there must be
b. P88,333 d. P169,263
a. Deposits credited by the bank but not yet recorded
by the company
b. Deposits in transit
8. The following data pertaining to the cash transactions
c. Outstanding checks
and bank account of Mandirigma Company for the
d. Bank charges not yet recorded by the company
month of May are available to you:
4. If the cash balance shown in a company’s accounting Cash balance, per records, May 31 P17,194
records is less than the correct cash balance and Cash balance, per bank statement, 5/31 31,948
neither the company nor the bank has made any Bank service charge for May 109
errors, there must be Debit memo for the cost of printed checks
a. Deposits credited by the bank but not yet recorded delivered by the bank 125
by the company Outstanding checks, May 31 6,728
b. Deposits in transit Deposit of May 30 not recorded by bank
c. Outstanding checks until June 1 4,880
d. Bank charges not yet recorded by the company Proceeds of a bank loan of May 30, net of
interest of P300 5,700
5. If the cash balance in a company’s bank statement is Proceeds from a customer's promissory
less than the correct cash balance and neither the note, including interest of P100 8,100
company nor the bank has made any errors, there Check No. 2772 issued to a supplier
must be entered in the accounting records at
a. Deposits credited by the bank but not yet recorded P2,100 but deducted in the bank
by the company statement at an erroneous amount of 1,200
b. Outstanding checks Stolen check lacking an authorized
c. Bank charges not yet recorded by the company signature, deducted from Mandirigma's
d. Deposits in transit account by the bank in error 800
Customer's check returned by the bank
6. The information below is from the books of the marked NSF; no entry has been made
Seminole Corporation on June 30: in the accounting records to record the
returned check 760
Balance per bank statement P11,164
Receipts recorded but not yet deposited What is the correct cash balance at May 31?
in the bank 1,340 a. P29,200 c. P30,000
Bank charges not recorded 16 b. P30,300 d. P30,900
Note collected by bank and not
recorded on books 1,120
Outstanding checks 1,100
NSF checks - not recorded on books nor
redeposited 160

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EXCEL PROFESSIONAL SERVICES, INC.

Use the following information for the next four questions. SOLUTION GUIDE #13:
Shown below is the bank reconciliation for YOUR Company
Deposits in transit, beg P xx
for the month of May:
Collections this period xx
Balance per bank, May 31 P75,000 Total xx
Add: Deposits in transit 12,000 Deposits credited by bank this period ( xx)
Total 87,000 Deposits in transit, end P xx
Less: Outstanding checks P14,000
Bank credit recorded in error 5,000 19,000
Cash balance per books, 5/31 P68,000 SOLUTION GUIDE #14:
The bank statement for the month of June contains the
Outstanding checks, beg P xx
following data:
Checks issued this period xx
Total deposits P55,000 Total xx
Total charges, including an NSF check of Checks paid by bank this period ( xx)
P4,000 and a service charge of P200 48,000 Outstanding checks, end P xx
All outstanding checks on May 31, including the bank
credit, were cleared in the bank in June.
Use the following information for the next two questions.
There were outstanding checks of P15,000 and deposits in
transit of P19,000 on June 30. Poni Company's accountant is preparing its October bank
reconciliation and has collected the following data:
9. Cash receipts per books in June is
Per Books Per Bank
a. P74,000 c. P62,000
Oct. receipts P28,100 P26,000
b. P43,000 d. P48,000
Oct. disbursements 28,600 27,000
10. Cash disbursements per books in June is Note collected by bank 3,500 4,800
a. P90,200 c. P44,800 Service charge 800 500
b. P42,800 d. P39,800
Additionally, deposits in transit and outstanding checks on
11. Cash balance per books as of June 30 is October 31 were, P7,800 and P4,100 respectively.
a. P82,000 c. P86,000
b. P85,200 d. P90,200 15. The deposits in transit as of September 30 is
a. P4,400 c. P 7,000
12. Cash balance as adjusted as of June 30 is b. P5,700 d. P11,200
a. P82,000 c. P86,000
b. P85,200 d. P90,200 16. The outstanding checks as of September 30 is
a. P2,200 c. P2,800
b. P2,500 d. P5,400
Use the following information for the next two questions.
Banaue Company deposits all receipts and makes all
payments by check. The following information is available SOLUTION GUIDE #15:
from the cash records:
Deposits in transit, beg P xx
May 31 Bank Reconciliation
Collections this period xx
Balance per bank P262,460
Total xx
Add: Deposits in transit 21,000
Deposits credited by bank this period ( xx)
Deduct: Outstanding checks ( 38,000)
Deposits in transit, end P xx
Balance per books P245,460

SOLUTION GUIDE #16:

Month of June Results Per Bank Per Books
Balance June 30 P279,950 P303,550
Outstanding checks, beg P xx
June deposits 107,840 158,890
Checks issued this period xx
June checks 111,000 100,800
Total xx
June note collected (not
Checks paid by bank this period ( xx)
included in June deposits) 30,000 -0-
Outstanding checks, end P xx
June bank service charge 350 -0-
June NSF check of a customer
returned by the bank
(recorded by bank as a
charge) 9,000 -0-

13. The deposits in transit as of June 30 is

a. P72,050 c. P51,050
b. P70,250 d. P42,050

14. The outstanding checks as of June 30 is

a. P27,800 c. P37,150
b. P28,700 d. P31,750
- now do the DIY drill -

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EXCEL PROFESSIONAL SERVICES, INC.

DO-IT-YOURSELF (DIY) DRILL

1. The bookkeeper of Santa Clara Co. recently prepared 4. Part of Tsibog Co.’s unadjusted trial balance at
the following bank reconciliation: December 31 showed a Cash balance of P17,400. The
balance per bank statement was P12,000 on December
Santa Clara Co.
31. Outstanding checks amounted to P6,900. Interest
Bank Reconciliation
of P40 was credited to the enterprise's account by the
December 31
bank during December, but has not yet been entered
on the company’s books.
Balance per bank statement P126,420
Add: Assuming no errors exist in the company’s cash
Deposit in transit P8,700 balance, deposits in transit at December 31 amount to
Checkbook printing a. P 5,400 c. P12,300
charge 210 b. P12,260 d. P12,340
Error made in recording
check No. 25 (issued
in December) 1,600 5. Reconciliation of Heaven Company’s bank account at
NSF check 5,000 15,510 May 31 is:
P141,930
Balance per bank statement 2,100,000
Deduct:
Deposits in transit 300,000
Outstanding checks P4,480
Checks outstanding ( 30,000)
Note collected by bank
Correct cash balance 2,370,000
(includes P50 interest 9,500 13,980
Balance per books P127,950 Balance per book 2,372,000
Bank service charge ( 2,000)
Santa Clara has P9,100 cash on hand on December 31.
Correct cash balance 2,370,000
The amount Santa Clara should report as cash on the
June data are as follows:
balance sheet as of December 31 should be
a. P120,260 c. P130,640 Bank
b. P139,740 d. P132,240 Total credits P1,620,000
Total debits 2,300,000
Collection by bank (P400,000
2. As of June 30, the bank statement of Ang Po Trading Note plus interest) 420,000
had an ending balance of P373,612. The following NSF check 10,000
data were assembled in the course of reconciling the Balance 1,420,000
bank balance:
• The bank erroneously credited Ang Po Trading for Books
P2,150 on June 22. Deposits recorded 1,800,000
• During the month, the bank charged back NSF Checks recorded 2,360,000
checks amounting to P2,340 of which P800 had Balance 1,810,000
been redeposited by the 25th of June. The deposits in transit on June 30 amount to
• Collection for June 30 totalling P10,330 was a. P120,000 c. P900,000
deposited the following month. b. P480,000 d. P 0
• Checks outstanding as of June 30 were P30,205.
• Notes collected by the bank for Ang Po Trading
were P8,150 and the corresponding bank charges 6. Sandy, Inc. had the following bank reconciliation at
were P50. March 31:
The adjusted bank balance on June 30 is
Balance per bank statement, 3/31 P37,200
a. P351,587 c. P353,927
Add: Deposit in transit 10,300
b. P358,147 d. P359,687
47,500
Less: Outstanding checks 12,600
Balance per books, 3/31 P34,900
3. Woody Company's accountant is preparing its October
bank reconciliation and has collected the following Data per bank for the month of April follow:
data: Deposits P42,700
Per Books Per Bank Disbursements 49,700
Oct. 1 balance P11,600 P10,000
Oct. deposits 24,600 21,200 All reconciling items at March 31 cleared the bank in
Oct. checks 27,800 29,000 April. Outstanding checks at April 30 totaled P5,000.
Note collected (includes There were no deposits in transit at April 30. What is
10% interest) - 4,400 the cash balance per books at April 30?
Oct. service charge - 20 a. P25,200 c. P27,900
Oct. 31 balance 8,400 6,580 b. P30,200 d. P35,500

Additionally, deposits in transit and outstanding checks

from September's reconciliation were, P4,400 and
P2,800 respectively.
The correct balance for cash at October 31 should be:
a. P13,980 c. P11,180
b. P12,780 d. P10,960 - end -

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EXCEL PROFESSIONAL SERVICES, INC.

ILLUSTRATIVE PROBLEM
The Cash in Bank account of Dollar Company disclosed a f) CM – Note collected, net ( 25,500)
balance of P203,000 as of December 31. The bank
statement as of December 31 showed a balance of g) Deposits in transit 24,000
P106,000. Upon comparing the bank statement with cash
records, the following facts were developed: h) Outstanding checks ( 35,000)

a. The company’s account was charged on December 26 i) Erroneous bank credit ( 20,000)
for a customer’s uncollectible check amounting to
P30,000. j) Petty cash fund 10,000
b. A two-month, 17% P60,000 customer’s note dated k) Stolen receipts 60,000
October 25, discounted on November 25, was
dishonored on December 25, and the bank charged the l) Double counted deposit 20,000
company P62,000, which included a protest fee of
P2,000. Balance per book, 12/31 P203,000
c. A customer’s check for P15,400 was entered as
P14,500 by both the depositor and the bank but was SOLUTION (Book to Bank):
later corrected by the bank.
d. Check no. 142 for P12,425 was entered in the cash Balance per book, 12/31 P203,000
disbursements journal at P12,245 and check no. 156
for P3,290 was entered as P32,900. a) DM – Customer’s uncoll. check ( 30,000)
e. Bank service charges of P1,830 for December were not
b) DM – Dishonored disc. NR ( 62,000)
yet recorded on the books.
f. A bank memo stated that a customer’s note for c) Error – Understated collections 900
P25,000 and interest of P1,000 had been collected on
December 28; and the bank charged P500. (No entry d) Error – Overstated payments 29,430
was made on the books when the note was sent to the
bank for collection). e) DM – service charge ( 1,830)
g. Receipts on December 31 for P24,000 were deposited f) CM – Note collected, net 25,500
on January 2.
h. The following checks were outstanding on Dec. 31: g) Deposits in transit ( 24,000)
No. 123 P3,000 No. 154 P4,000
143 * 2,000 157 6,000 h) Outstanding checks 35,000
144 7,000 159 7,000 i) Erroneous bank credit 20,000
147 3,000 169 5,000
* Certified by the bank in December j) Petty cash fund ( 10,000)
i. A deposit of P20,000 was recorded by the bank on
December 5, but it should have been recorded for k) Stolen receipts ( 60,000)
Dolor Company rather than Dollar Company.
j. Petty cash of P10,000 was included in the Cash in Bank l) Double counted deposit ( 20,000)
balance. Balance per bank, 12/31 P106,000
k. Proceeds from cash sales of P60,000 for December 18
were stolen. The company expects to recover this
amount from the insurance company. The cash SOLUTION (Adjusted Balance Method):
receipts were recorded in the books, but no entry was
made for the loss. Bank Books
l. The December 21 deposit included a check for P20,000 Unadjusted balance, 12/31 P106,000 P203,000
that had been returned on December 15 marked NSF.
Dollar Company had made no entry upon return of the a) DM – Customer’s uncoll. check (30,000)
check. The redeposit of the check on December 21
was recorded in the cash receipts journal of Dollar b) DM – Dishonored disc. NR (62,000)
Company as a collection on account.
c) Error – Understated collections 900
REQUIRED: d) Error – Overstated payments 29,430
Prepare a bank reconciliation using: e) DM – service charge ( 1,830)
a) Bank to book method;
b) Book to bank method; and f) CM – Note collected, net 25,500
c) Adjusted balance method
g) Deposits in transit 24,000

h) Outstanding checks ( 35,000)

SOLUTION (Bank to Book):
i) Erroneous bank credit ( 20,000)
Balance per bank, 12/31 P106,000
j) Petty cash fund (10,000)
a) DM – Customer’s uncoll. check 30,000
k) Stolen receipts (60,000)
b) DM – Dishonored disc. NR 62,000
l) Double counted deposit (20,000)
c) Error – Understated collections ( 900)
Adjusted balance, 12/31 P75,000 P75,000
d) Error – Overstated payments ( 29,430)

e) DM – service charge 1,830 J - end of FAR.2917 - J

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