BANK RECONCILIATION

Activity 1: The following are the unadjusted cash balances of Bulacan Corporation for the month ended June 30, 2021:

Cash balances per bank statement, June 30, 2021 249,223.00

Cash balance per company records, June 30, 2021 248,758.80

The bank statement disclosed the following information:

1. A customer notes for P24,000 plus P240 interest was collected on June 30, 2021.
2. A customer check for P2,762.80 was returned because of insufficient funds (NSF check)
3. The month service charge was P300.00

A review of the company records disclosed the following:

1. A deposit for P22,857.40 mailed to the bank on June 29, 2021 did not appear on the bank statement.
2. Customer checks totaling P6,548 were on hand at the end of June awaiting deposit.
3. The following company checks were outstanding at the end of June: #862
1,923.80 - Outstanding Check
#864 2,943.60 - Outstanding Check
#865 5,265.00 - Outstanding Check

4. Check #843 written for P1,824.00 in payment of a creditor account and included with the cancelled checks in the
bank statement has been erroneously recorded as P384.00 in the company records. Book Error

Requirements:

BANK
Balance per bank 249 223.00
Add: Deposit in Transit 22 857.40
6 548 29 405.40
TOTAL 278 628.40
Less: Outstanding Checks
#862 1,923.80
#864 2,943.60
#865 5,265.00 (10 132.40)
Adjusted Cash Balance 268 496.00

BOOK
Balance per book 248 758.80
Add: Credit Memos
Customer Notes 24 000
Interest 240 24 240
TOTAL 272 998.80
Less: Debit Memos
NSF Check 2 762.80
Monthly service charge 300 (3 062.80)
269 936.00
Add/Less: Book error, if any
Check No. 843 1 440 (1 440)
Adjusted Cash Balance 268 496.00
ADJUSTING ENTRY
Cash 24 240
Notes Receivables 24 000
Interest Income 240

Accounts Receivable 2 762.80

Cash 2 763.80

Bank Service Charge 300

Cash 300

Accounts Payable 1 440

Cash 1440
PROOF OF CASH

Activity 2: The following are the unadjusted cash balances of Bulacan Corporation for the month ended June 30, 2021:
Cash balances per bank statement, June 30, 2021 249,223.00
Cash balance per company records, June 30, 2021 248,758.80

The bank statement disclosed the following information:

1. A customer notes for P24,000 plus P240 interest was collected on June 30, 2021.
2. A customer check for P2,762.80 was returned because of insufficient funds (NSF check)
3. The month service charge was P300.00

A review of the company records disclosed the following:

1. A deposit for P22,857.40 mailed to the bank on June 29, 2021 did not appear on the bank statement.
2. Customer checks totaling P6,548 were on hand at the end of June awaiting deposit.
3. The following company checks were outstanding at the end of June: #862
1,923.80 - Outstanding Check
#864 2,943.60 - Outstanding Check
#865 5,265.00 - Outstanding Check

4. Check #843 written for P1,824.00 in payment of a creditor account and included with the canceled checks in the
bank statement has been erroneously recorded as P384.00 in the company records.
5. May 31, 2021 bank balance P272,348.40
6. Deposit in transit (May 2021) received by the bank on June 02, 2021 24,803.00
7. Total receipts recorded by the bank during June, 2021 528,423.40
8. Total payments recorded by the bank during June, 2021 551,548.80
9. May 31, 2021 book balance 289,630.40
10. Outstanding checks on May 31, 2021
#781 3,263.00
#782 4,258.00
11. Total receipts per books during June, 2021 508,785.80
12. Total payments per books during June, 2021 549,657.40
 Reconciliation Receipts Disbursement Reconciliation
May 31 June June June 30

Balance per bank 272 348.40 528 423.40 551 548.80 249 223.00
Add: Deposit in Transit
May 31 24 803 (24 803)
June 30 22 857.40 22 857.40
6 548.00 6 548.00

Less: Outstanding Checks

May 31
#781 (3 263) (3 263)
#782 (4 258) (4 258)

June 30
#862 1 923.80 (1 923.80)
#864 2 943.60 (2 943.60)
#865 5 265.00 (5 265)
Adjusted Balance 289 630.40 533 025.80 554 160.20 268 496

Balance per book 289 630.40 508 785.80 549 657.40 248 758.80
Add: Credit Memos
Note Collection 24 000 24 000
Interest Collected 240 240

Less: Debit Memos

NSF Check 2 762.80 (2 762.80)
Service Charge 300 (300)

Add/Less: Book Error 1 440 (1 440)

Adjusted Balance 289 630.40 533 025.80 554 160.20 268 496.00
Activity 5. The December 31, 2020, bank statement for Miguel Corporation showed a P2,049.25 balance. On this date the
company’s Cash account reflected a P325.60 overdraft. In reconciling these amounts, the following information is discovered:

1. Cash on hand for undeposited sales receipts, December 31, 2020, P130.25
2. Customer NSF check returned with bank statement, P420.40
3. Cash sales of P640.25 for the week ended December 18, 2020 were recorded on the books. The cashier reports this
amount missing, and it was not deposited in the bank.
4. Note receivable of P2,500 and interest of P25 collected by the bank and not recorded on the books.
5. Deposit in transit December 31, 2020, P350
6. A customer check for P290.40 in payment of its account was recorded on the books at P940.20
7. Outstanding checks, P2,040.55. Includes a duplicate check of P70.85 to G. Violet, who notified. Miguel that the
original was lost. Miguel stopped payment on the original check and has already adjusted the cash account in the
accounting records for this amount.
Requirement:
1. Prepare a December 31, 2020 bank reconciliation for Miguel Corporation.
2. Prepare any journal entries necessary by Miguel Corporation to record the information from Requirement 1.
Activity 6. The Ayesa Company received a bank statement for February 2021, as follows: From:
Standard Bank, Manila
To: Ayesa Company, Legarda St., Manila

Date Checks Deposits Balance

Feb. 1 P4,524.80
7 P2,700.33 P8,642.61
9 3,484.81
14 6.00 SC 460.00 CM
16 274.09
21 4.133.60 3,385.49
23 69.69 NSF
28 P6,344.38

SC= Service Charge CM=

Credit Memo NSF=
Check Returned DM=
Debit Memo

The receipt of P460 on February 14, 2021 was for a P445 note collected by the bank, plus P20 current interest, less a P5
service charge. The company’s accounting records contained the following information:

Cash balance on February 28, 2021 from the books: P2,610.42

Requirement:
1. Prepare a bank reconciliation on February 28, 2021 for the Ayesa Company.
2. Prepare the journal entries that the Ayesa Company should record as a result of the reconciliation.
Acitivty 7. Duke Equipment Co. closes its books regularly on December 31, but at the end of 2020 it held its cash book open
so that a more favorable balance sheet could be prepared for credit purposes. Cash receipts and disbursements for the first 10
days of January of the following year were recorded as
December transactions. The following information is given.

1. January cash receipts recorded in the December cash book totaled P39,640, of which P22,000 represents cash
sales, and P17,640 represents collections on account for which cash discounts of P360 were given.

2. January cash disbursements recorded in the December check register liquidated accounts payable of P26,450 on
which discounts of P250 were taken.

3. The ledger has not been closed for 2020.

4. The amount shown as inventory was determined by physical count on December 31, 2020.

Requirement:
1. Prepare any entries you consider necessary to correct Duke’s account at December 31.
2. To what extent was Duke Equipment Co. able to show a more favorable balance sheet at
December 31 by holding its cash book open? (Use ratio analysis). Assume that the balance sheet that was
prepared by the company showed the following amounts:

Debit Credit
Cash 39,000
Receivables 42,000
Inventories 67,000
Accounts Payable 45,000
Other current liabilities 14,200