ILLUSTRATIVE EXAMPLES

Bank Reconciliation
1. Pinnacle Company provided the following information:

Cash in Bank - BPI

Dec. 1 Deposit P100,000 Dec. 4 Check No. 101 P5,000
Dec. 21 Deposit 50,000 Dec. 6 Check No. 102 15,000
Dec. 27 Deposit 10,000 Dec. 8 Check No. 103 40,000
Dec. 31 Deposit 80,000 Dec. 8 Check No. 104 10,000
Dec. 10 Check No. 105 30,000
Dec. 14 Check No. 106 25,000
Dec. 28 Check No. 107 50,000

Deposit Liability - Pinnacle Company

Date Check Withdrawal Deposits Balance
No.
Dec. 2 100,000 100,000
Dec. 18 104 10,000 90,000
Dec. 20 101 5,000 85,000
Dec. 22 106 25,000 60,000
Dec. 27 50,000 110,000
Dec. 29 10,000 120,000
Dec. 29 103 40,000 80,000
Dec. 29 CM 30,000 110,000
Dec. 31 Service charge DM 2,000 108,000

The credit made by bank on December 29 represents the proceeds of a note received from a customer
which was given to the bank for collection by the entity on December 26.

Requirements:
a. Prepare a bank reconciliation on December 31.
b. Prepare adjusting entries.

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2. CPA Company provided the following information for the month of December:

Balance per bank statement, December 31 P2,800,000

Bank service charge for December 12,000
Interest paid by bank to CPA Company for December 10,000
Deposits made but not yet recorded by the bank 350,000
Checks written but not yet recorded by the bank 650,000

The entity discovered that it had drawn and erroneously recorded a check for P46,000 that should
have been recorded for P64,000.

What is the cash balance per ledger on December 31?

a. P2,500,000
b. P2,520,000
c. P2,540,000
d. P2,800,000

3. BSA Company provided the following data relating to the cash transactions and bank account for the
month of July:

Cash balance per ledger ?

Cash balance per bank statement ?
Debit memo for July service charge 5,000
Deposit of July 31 not recorded by bank until August 1 450,000
Outstanding checks, including certified check of P50,000 750,000
Proceeds of bank loan not recorded in ledger 500,000
Proceeds from a customer note, face P400,000, collected by bank,
collection fee of P15,000 435,000
A creditor check had been entered into the book as P20,000 and was
erroneously deducted by the bank at 200,000
A customer check was returned by bank marked DAIF 50,000
Correct cash balance 3,000,000

1. What is the cash balance per ledger?

a. P2,120,000
b. P3,055,000
c. P2,555,000
d. P2,065,000

2. What is the cash balance per bank statement?

a. P3,700,000
b. P3,070,000
c. P3,050,000
d. P2,370,000

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Petty Cash Fund
4. Mastery Company established a petty cash fund for P6,000. The petty cash fund included the
following details:

Coins and currency P2,000

Paid vouchers
Transportation P1,600
Gasoline 400
Office supplies 500
Postage stamps 300
Due from employees 1,200 4,000

Employee’s check returned by bank marked “NSF” 1,000

Check drawn to the order of petty cash custodian 4,000

What amount of petty cash should be reported?

a. P2,000
b. P7,000
c. P6,000
d. P9,000

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