III.

Rose Company uses a calendar-year accounting period. The following information is available about
the company's cash.

Rose Company
Bank Reconciliation

Balance per bank statement P4,942

Add: Deposit in transit 610
Deduct: Outstanding checks
No. 606 P177
No. 607 248
Correct cash balance P5,127

Balance per books P5,139

Deduct: Bank service charge 12
Correct cash balance P5,127

First National Bank

General Account: Rose Company

Date Debits Credits Credits

4-30 4,942
5-01 610 5,552
5-02 177 5,375
5-04 248 755 1,552 5,924
5-05 437 5,487
5-09 489 3,621 8,619
5-12 705 1,986 9,900
5-20 930 8,970
5-22 423 8,547
5-26 2,549 11,096
5-29 255 NSF 10,841
5-30 20 DM 5,798 5,023
5-31 14 SC 1,290 CM 6,299
Total debits 10,251 Total credits P11,608
Legend: DM: Debit memo NSF: No sufficient funds check
CM: Credit memo SC: Service charge

Rose Company's Cash Account

Taken from General Ledger
 Cash

Balance, April 30 P 5,139 Cash Disbursement

Cash Receipts Journal, May 31 P10,816
Journal, May 31 10,583

Information Taken from Rose Company

Cash Receipts Journal

Date Cash Debit
5-03 P 1,552
5-08 3,621
5-12 1,986
5-25 2,549
5-31 875
P10583

Cash Payments Journal

Date Check No. Cash Credit

5-01 608 P 755

5-03 609 473

5-06 610 489

5-11 611 705

5-16 612 930

5-21 613 243

5-27 614 511

5-29 615 5,798

5-30 616 346

5-31 617 566

P10,816

Additional Information:
1. During May a collection charge of P20 that was applicable to Rosal Company was erroneously
deducted by the bank from Rose Company's account.

2. The credit memo shown on the bank statement relates to a note that the bank collected on Rose's
behalf. The note had a face value of P1,200 and Rose earned interest of P90 during the current
accounting period. The company has not yet recorded the collection.

3. Rose failed to record the bank service charge for April (see April reconciliation).

4. The NSF check shown on the bank statement had been received during May from a customer on
account. The return of the check has not yet been recorded by Rose.

5. Rose made two errors in recording cash payments during May:

Actual Amount Amount

Check No. of Check Recorded
609 437 473
613 423 243

Check No. 609 was for delivery expense; check no. 613 was issued to purchase equipment.

Required:

1. Prepare a bank reconciliation dated May 31.

2. Prepare the necessary journal entries.