BMSH2003

Preparing Monthly Bank Reconciliation Statement using MS Excel

Bank Reconciliation
Objectives:
At the end of the exercise, the students will be able to:
Use MS Excel to prepare a monthly bank reconciliation statement.

Equipment:
• Computer installed with MS Excel

Basic Principle/s:
A bank reconciliation is a statement that brings into agreement the cash balance per book and cash balance
per bank (Valix, 2017). A bank reconciliation is an analysis of the items and amounts that result in the cash
balance reported in the bank statement (balance per bank statement) to differ from the balance of the cash
account in the ledger (balance per books). The adjusted cash balance determined in the bank reconciliation
is reported on the balance sheet. It is usually prepared monthly as banks provide their clients bank
statements at the end of every month.
A bank statement is a monthly report of the bank to the depositor showing (Valix, 2017):
a) the cash balance per bank at the beginning;
b) the deposits made by the depositor and acknowledged by the bank;
c) the checks drawn by the depositor and paid by the bank; and
d) the daily cash balance per bank during the month

Procedures:
1. Open MS Excel and use a new workbook.
2. Rename the new sheet as ‘Bank Reconciliation’.
3. Analyze the following problem:

The following cash balances are available for Imogen Company for the month ended June 30, 201A.

Cash balance per bank statement, June 30, 201A P124,611.50

Cash balance per books, June 30, 201A 124,379.40

The bank statement disclosed the following information:

a. Charges by bank included a returned customer’s check for P1,381.40 because of insufficient funds
(NSF) and service charge for June of P150.
b. Credits by the bank included a customer’s note for P12,000 plus interest of P120 that was collected
on June 29, 201A.

A review of the company records disclosed the following information:

a. A deposit of P11,428.70 made on June 29, 201A did not appear on the bank statement.
b. Customer’s checks totaling P3,274.00 were still on hand on June 30,201A awaiting deposit.
c. The following company checks were still outstanding as of June 30, 201A:

Check #0157823 P2,632.50

Check #0157827 1,471.80
Check #0157830 961.90

d. Check #0157805 for P912.00 in payment of a creditor account and included with canceled checks
in the bank statement has been erroneously recorded as P192.00.

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4. You are required to do the following: Prepare a bank reconciliation statement for Imogen
Company as of June 30, 201A. Use the three (3) forms of bank reconciliation.
5. Refer to Figures 1-3 for the sample formats of the bank reconciliation statement. This can also be
found in 06 Handout 1. Note that these formats can be changed depending on the given values.

ABC Company
Bank Reconciliation Statement
December 31, 201A
Unadjusted balance per bank Pxxx
Add: Receipts not yet deposited/Deposit in transit Pxxx
Erroneous charge by bank xxx xxx

Less: Outstanding checks xxx

Erroneous credit by bank xxx xxx
Adjusted bank balance Pxxx

Unadjusted balance per books

Add: Note collected by bank xxx
Interest earned xxx
Overstated disbursements recorded in the books xxx
Understated receipts recorded in the books xxx xxx

Less: NSF check returned xxx

Bank service charge xxx
Understated disbursements recorded in the books xxx
Overstated receipts recorded in the books xxx xxx
Adjusted book balance Pxxx
Figure 1. Adjusted balances method

ABC Company
Bank Reconciliation Statement
December 31, 201A
Balance per bank statement Pxxx
Add: Deposits in transit Pxxx
NSF check returned xxx
Bank service charge xxx xxx
Total xxx
Less: Outstanding checks xxx
Note collected by bank xxx
Interest earned xxx xxx
Balance per books Pxxx
Figure 2. Bank balance to book balance

ABC Company
Bank Reconciliation Statement
December 31, 201A
Balance per books Pxxx
Add: Note collected by bank Pxxx
Interest earned xxx
Outstanding checks xxx xxx
Total xxx
Less: Deposits in transit xxx
NSF check returned xxx
Bank service charge xxx xxx
Balance per bank statement Pxxx
Figure 3. Book balance to bank balance

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6. Prepare the heading:

a. Select cells A1-D1, merge, and type ‘Imogen Company’.
b. Select cells A2-D2, merge, and type ‘Bank Reconciliation Statement’.
c. Select and merge cells A3-D3 for the date.
7. Afterward, use amounts given above to prepare the bank reconciliation statement under adjusted
balances method.
8. After preparing the adjusted balances method, prepare the heading again for the bank balance to
book balance method and book balance to bank balance method.
9. Design your own bank reconciliation statement.
10. Save the file.

Rubric for scoring:

CRITERIA PERFORMANCE INDICATORS POINTS
Neatness and The spreadsheet has exceptional formatting, and the information is well-
20
Organization organized.
The spreadsheet formulas are well-developed and will correctly determine the
Formulas 30
needed information.
Titles, Labels, and
The spreadsheet contains clearly labeled rows and columns. 10
Headings
The spreadsheet meets all the necessary requirements to interpret the result of
Content 40
the operation.
TOTAL 100

References

Valix, C. T. (2017). Financial Accounting Vol. 1. Manila: GIC Enterprises & Co., Inc.

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