3-8 (Bank Reconciliation)

Maruya Company
Bank Reconciliation – Adjusted Balance Method
For the month of April, 2020

April
March 31 Receipts Disbursements April 30
Unadjusted bank balances P 21,560 P 220,450 P 218,970 P 23,040
Undeposited receipts:
March 9,060 (9,060)
April 10,120 10,120
Outstanding checks:
March (2,675) (2,675)
April 1,430 (1,430)
Erroneous bank debit (950) 950
Payment to creditor in cash _______ 1,210 1,210 _______
Adjusted bank balances P 27,945 P 222,720 P 217,985 P 32,680

Unadjusted book balances: P 16,545 P 222,190 P 216,055 P 22,680

NSF Checks:
Returned, recorded in April 1,040 1,040
Returned, recorded in May 860 (860)
Unrecorded bank collections:
March 12,150 (12,150)
April 11,640 11,640
Bank service charge:
March (750) (750)
April 420 (420)
Book error in December _______ ________ 360 (360)
Adjusted book balances P 27,945 P 222,720 P 217,985 P 32,680

Adjusting journal entries:

Date Particulars PR Debit Credit
2020
Apr. 3 Accounts receivable P 860
0
Cash in bank P 860
NSF check returned but recorded in May

Cash in bank 11,640

Note receivable 11,640
Unrecorded bank collections

Bank service charge 420

Cash in bank 420
Unrecorded bank service charge

Accounts payable 360

Cash in bank 360
Erroneous check drawn
3-9 (Cut-off Tests):
A. Which of the following cash transfers would appear as a deposit in transit on the December 31,
2021 bank reconciliation?

Bank Account A Bank Account B

Disbursing Date (Month/Day) Receiving Date (Month/Day)
Per Bank Per Books Per Bank Per Books
a. 12/31 12/30 12/31 12/30
b. 1/2 12/30 12/31 12/31
c. 1/3 12/31 1/2 1/2
d. 1/3 12/31 1/2 12/31

B. Which of the following transfers would not appear as an outstanding check on the December 31,
2021 bank reconciliation?

Bank Account A Bank Account B

Disbursing Date (Month/Day) Receiving Date (Month/Day)
Per Bank Per Books Per Bank Per Books
a. 12/31 12/30 12/31 12/30
b. 1/2 12/30 12/31 12/31
c. 1/3 12/31 1/2 1/2
d. 1/3 12/31 1/2 12/31

C. An auditor should trace bank transfers for the last part of the audit period and for the first part of
the subsequent period to detect whether
a. The cash receipts journal was held open for a few days after the year-end.
b. The last checks recorded before the year-end were actually mailed by the year-end.
c. Cash balances were overstated because of kiting.
d. Any unusual payments to or receipts from related parties occurred.