ACTIVITY - BANK RECONCILIATION

Sensible Company provided the following ledger account of the cash in bank maintained with
Metrobank:

Required:
a. Prepare a bank reconciliation statement on Dec. 31 using:
(1) adjusted balance method (2) book to bank method (3) bank to book method
b. Prepare the necessary adjusting entries on Dec. 31.

Sensible Company
Bank Reconciliation
December 31, 2019

Book Balance 110,000

Add: Collection by bank 45,000
Total 155,000
Less: NSF Check ( 10,000)
Service Charge ( 5,000)
Error in check 776 ( 27,000)
Adjusted Book Balance 113,000

Bank balance 135,000

Add: Deposits in Transit 60,000
Error check 1042 8,000
Total 203,000
Less: Outstanding Check
#770 (20,000)
#775 (30,000)
#777 (40,000) ( 90,000)
Adjusted Bank Balance 113,000

Adjusting entries
2019
Dec. 31 Cash in Bank 45,000
Collection Fee 5,000
 Notes Receivable 50,000
Dec. 31 Accounts Receivable 10,000
Cash in Bank 10,000
Dec. 31 Bank Service charge 5,000
Cash in Bank 5,000
Dec. 31 Accounts Payable 27,000
Cash in Bank 27,000

Pathetic Company
Bank Reconciliation Statement
For the Month Ended 31 December 2020

Cash in bank balance per general ledger 1,300,000

Add:
Correction of erroneous payment record 20,000
Payment stops on check number 555 10,000 30,000
Sub-total 1,330,000
Less:
Service charge for August 5,000
NSF check received from a customer 85,000
Misappropriated cash 30,000 ( 120,000)
Adjusted cash in bank balance per general ledger 1,210,000

Balance per bank statement 1,200,000

Add:
Receipts of August 31, deposited September 245,000
Sub-total 1,445,000
Less: Outstanding checks ( 235,000)
Adjusted balance per bank statement 1,210,000

B.

Cash 20,000
Accounts Payable 20,000
Cash 10,000
 Accounts Payable/Miscellaneous
Income 10,000
Bank Service Charge 5,000
Cash 5,000
Accounts Receivable 85,000
Cash 85,000
Receivable from Cashier 30,000
Cash 30,000
Receivable from Cashier 10,000
Sales Discount 10,000