ACFAR 1231

Assignment 2 – Bank Reconciliation

PROBLEM 1:

Sugar Company provided the following bank reconciliation on January 31 of the current year:

Bank balance 300,000

Add Deposits in transit 600,000
Total 900,000
Deduct Outstanding checks:
No. 114 240,000
115 160,000
116 60,000 460,000
Adjusted bank balance 440,000

All receipts of cash are deposited in the bank account. The bank statement for the month of February is
presented below.

_______________________________FAMILY BANK__________________________________________
Checks Deposit Date Balance
Balance forwarded Jan. 31 300,000
240,000 600,000 Feb. 1 660,000
2,000,000 3 2,660,000
200,000 5 2,460,000
900,000 400,000 7 1,960,000
160,000 9 1,800,000
1,000,000 10 2,800,000
500,000 13 2,300,000
1,200,000 16 3,500,000
1,300,000 21 4,800,000
550,000 23 4,250,000
5,000 SC 24 4,245,000
1,000,000 550,000 27 3,795,000
800,000 270,000 CM 28 3,265,000

The following information was taken from the credit memo of February 28:

Face of the note 250,000

Interest on the note 30,000
Maturity value of the note 280,000
Collection charge 10,000
Credit to your account 270,000
The following data were taken from the cash journals of Sugar Company:

Cash receipt Journal Cash Disbursement Journal

Date Debit Cash Check No. Credit cash

Feb. 2 2,000,000 117 200,000
6 400,000 118 900,000
9 800,000 119 800,000
10 200,000 120 500,000
15 1,200,000 121 550,000
20 1,300,000 122 180,000
24 550,000 123 1,000,000
28 450,000 124 120,000
________ 125 250,000
6,900,000 4,500,000

Required:

a. Prepare bank reconciliation on February 28, showing the before balances before and after
adjustments.
b. Prepare journal entries to record the adjustments that are indicated by the bank reconciliation.
Problem 2

Cream Company Provided the following information for the month of December:

Cash balance per ledger 5,000,000

Cash balance per bank statement 5,500,000
Proceeds of bank loan discounted on
December 1 for one year at 14% 516,000
Undeposited collections on December 31 300,000

Check of Black Company had been

incorrectly deducted by bank from
Cream Company account 50,000

Check of Cream Company in payment of

an account payable had been recorded
by the depositor as P20,000. The correct
amount is 200,000

The ledger account for cash was the only

Cash account kept the entity.
It included a petty cash account
Comprised of the following items:
Currency and coin 4,000
Supplies 2,000
Transportation 3,000
Postage 1,000 10,000

Deposit of Black Company credited by

Bank to the account of Cream Company 130,000
Deposit of December 27 omitted from bank statement 150,000
Outstanding checks 544,000

Required:

a. Prepare bank reconciliation on December 31.

b. Prepare one journal only necessary to adjust the cash account.