Bank reconciliation – Depositor vs.

Bank Journal Entries

1. The cash balance per books on June 30, 20x1 is P100,000, equal to the cash balance per bank statement on the
same date. The transactions in July 20x1 are summarized below:

a. Collections from customers totaled P500,000. All the collections were deposited; However, only P480,000
were credited by the bank to the entity’s account as of July 31, 20x1. The difference was due to bank cut-
off.
b. Checks drawn totaled P200,000, of which P140,000 were encashed during the period.
c. Customers deposited a total of P360,000 to the entity’s bank account as payment of accounts receivable.
The entity was not yet notified of the collections.
d. The bank debited the entity’s account for P40,000 representing payment for mobile phone charges. The
entity was not yet notified of the payment.

Requirements:
a. Prepare the journal entries in the books of (1) the entity and (2) the bank, respectively.
b. Compute for the following: (1) deposits in transit, (2) outstanding checks, (3) credit memo; and (4) debit
memo.
c. Prepare the July 31, 20x1 bank reconciliation.
d. Prepare the reconciling entries in the entity’s books.

Bank reconciliation

2. On October 31, 20x1, Dark Co.’s cash balance per records is P7,540, while the balance per bank statement is
P8,510. The following information is determined:
a. The bank statement reflects a P780 deposit that is not yet recorded in the books. The deposit pertains to a
collection of note receivable with a principal balance of P700; The difference represents the interest on the
note.
b. The bank statement also reflects a P25 withdrawal representing service charges for the month.
c. Dark Co. erroneously recorded a check drawn for P140 as P410. The check, which is payment for an account
payable, cleared the bank at the correct amount.
d. Dark Co. erroneously recorded a P910 collection of an account receivable as P190. The bank statement
reflects the correct amount of deposit.
e. A P1,900 check deposit on October 31 is not yet reflected in the bank statement.
f. The following checks drawn by Dark Co. are not yet presented to the bank for payment: Check #75 for
P325, Check #80 for P100, and Check #94 for P700.

Requirements:
a. Prepare the bank reconciliation for the month of October.
b. Prepare the reconciling entries in Dark Co.’s books.

Bank reconciliation – Bank to Book

3. The information below is from the books of the Seminole Corporation on June 30:
Balance per bank statement P11,164
Deposits in transit 1,340
Bank charges not yet recorded by Seminole 16
Note collected by the bank; not yet recorded 1,120
Outstanding checks 1,100
NSF checks – not yet recorded nor re-deposited 160

Requirement: How much is the cash balance per books on June 30 before adjustments?
4. Adcock Plastics Company deposits all receipts and makes all payment by check. The following information is
available from the cash records:

March 31 Bank Reconciliation

Balance per bank P26,746
Add: Deposit in transit 2,100
Deduct: Outstanding checks (3,800)
Balance per books P25,046

Month of April Results

Per Bank Per Books

Balance April 30 P27,995 P24,355
April deposits 10,784 12,889
April checks 11,100 13,080
April note collected (not included in April deposits) 3,000
April bank service charge 35
April NSF check of a customer returned by the bank (recorded by 900
bank as a charge)

Requirements:

a. Compute for the April 30 Deposits in transit.

b. Compute for the April 30 Outstanding checks.
c. Prepare the April 30 bank reconciliation.

Proof of Cash

5. Information on Blue Curtain Co. is shown below:

January 31 February 28
Book balance P264,400 P360,000
Book debits 120,000
Book credits 24,400
Bank balance 201,200 370,820
Bank debits 17,320
Bank credits 186,940
Credit memos 30,000 52,500
Bank charges 15,600 10,680
Understatement of book receipts 4,000
Overstatement of book receipts 2,800
Deposit in transit 95,040 43,800
Outstanding checks 13,440 15,600

Requirement: Prepare a proof of cash.