Assignment 1.

3: Bank Reconciliation

The bank statement for the checking of Cisco Systems, Inc. showed a Dec 31, 2019 balance of P1,463,21
might be useful in preparing a bank reconciliation is as follows:

• Outstanding check were P140,000

• The Dec 31. 2019 cash receipts of P59,500 were not deposited in the bank until Jan 2, 2020
• One check written in payment of rent for P24,600 was correctly recoded by the bank but was recorded b
P26,400 disbursement
• In accordance with prior authorization, the bank withdrew P45,000 directly from the checking account as
mortgage note payable. The interest portion of that payment was P5,000. Company has made no entry to
automatic payment
• Bank service charges of P1,400 were listed on the bank statement
• A deposit of P87,500 was recorded by the bank on Dec 13, but it did not belong to the company. Further
the bank indicates that the deposit should have been credited to the checking account of another company
• The bank statement included a charge of P12,500 for a customer's DAIF check. The check was returned
statement and the company will seek payment from the customer
• The company maintains a P20,000 petty cash fund that was appropriately reimbursed at the end of Dece
• According to instructions of the company on December 30, the bank withdrew P1,000,000 form the acco
purchased Philippine Treasury Bills for company. It recorded the transaction in its books on December 31
notice from the bank. Half of the treasury bills mature in two months and the other half in six months.

Required:
1. Prepare a bank reconciliation for its checking account at December 31, 2019
2. What amount would the company report as cash and cash equivalents in the current asset section of the
statement of financial position?

Answers:
1
Balance per bank statement 1,463,212
Outstanding checks - 140,000
Deposit in Transit 59,500
Error in recording the rent check (26,400-24,600) - 1,800
Automatic Mortgage Payable 45,000
Bank Service Charge 1,400
Bank error- deposit incorrectly credited to the company - 87,500
NSF check 12,500
Balance per book 1,352,312

Book
Unadjusted balances 1,352,312
Outstanding Checks
Deposit in Transit
 Error in recording the rent check (26,400-24,600) 1,800
Automatic Mortgage Payable - 45,000
Bank Service Charge - 1,400
Bank error- deposit incorrectly credited to the company
NSF check - 12,500
Adjusted balances 1,295,212

2
Current account balances 1,295,212
Petty Cash 20,000
Treasury Bills (1,000,000 x 0.50) 500,000
Total Cash and Cash equivalents 1,815,212

“I affirm that I shall not give or receive any unauthorized help on this assignment, and that all work shall be
2019 balance of P1,463,212. Information that

ntil Jan 2, 2020

e bank but was recorded by the company as

m the checking account as payment on a

any has made no entry to record the

ng to the company. Further verification with

ccount of another company
k. The check was returned with the bank

mbursed at the end of December

P1,000,000 form the account and
ts books on December 31 when it received
er half in six months.

current asset section of the December 31, 2019

Bank
1,463,212
- 140,000
59,500
 - 87,500

1,295,212

t, and that all work shall be my own.”