PROBLEMS

BANK
RECONCILIATION
With Analysis & Solutions
Reference: Basic Accounting Made Easy, Ballada
 Problem #5
 On July 31, 2018, the Cash in Bank account of Lope Dapun Blades had a
balance of P72,166.
 On that date, the bank statement indicated a balance of P95, 347.50.
 Comparison of returned checks and bank memos revealed the following:

1. Deposits in transit as at July 31 totaled P31,407.50.

2. Outstanding checks as at July 31 totaled P14,679.
3. The bank erroneously charged a P3,250 check of Lopez Glades against
the Lope Dapun Bank account.
4. A P250 bank service charge has not yet been recorded in the books.
5. Lope Dapun neglected to record P40,000 borrowed from the bank on a
10% six-month note. The bank statement has already credited the
P40,000.
6. Included with the paid checks is a memo indicating that Julio Markado’s
check for P6,400 had been returned DAIF. Markado, a customer, had
sent the check to pay an account of P6,600 less a P200 discount.
7. Lope Dapun recorded a P1,090 payment for repairs as P10,900.
Required:
8. Prepare the bank reconciliation for Lope Dapun Blades at July 31.
9. Prepare the journal entries to update the Cash in Bank account.
 Problem #5 Analysis & Solutions
Unadjusted BOOK
 On BALANCE
July 31, 2018, the Cash in Bank account
of Lope Dapun Blades had a balance of
P72,166.
 On that date, the bank statement indicated
Unadjusted BANK
a balance of P95, 347.50.
BALANCE
 Comparison of returned checks and bank
memos revealed the following (NEXT SLIDE):
Required:
1. Prepare the bank reconciliation for Lope
Dapun Blades at July 31.
2. Prepare the journal entries to update the
Cash in Bank account.
BANK 1. Deposits in transit as at July 31 totaled P31,407.50.
+
BANK – 2. Outstanding checks as at July 31 totaled P14,679.
BANK 3. The bank erroneously charged a P3,250 check of
+ Lopez Glades against the Lope Dapun Bank
account. Bank DEBIT in error
BOOK – 4. A P250 bank service charge has not yet been
recorded in the books.
5. Lope Dapun neglected to record P40,000 borrowed
BOOK from the bank on a 10% six-month note. The bank
+ statement has already credited the P40,000.
6. Included with the paid checks is a memo indicating
that Julio Markado’s check for P6,400 had been
BOOK – returned DAIF. Markado, a customer, had sent the
check to pay an account of P6,600 less a P200
discount.
for adjusting
7. Lope Dapun recorded a P1,090 payment for repairs
BOOK entries
as P10,900.
+ 10,900 – 1,090 = Overstatement of
9,810 payment
 P
ADD: Deposit in Transit P 95,347.50
31,407.50
Bank Error 3,250.00
TOTAL 34,657.50
P
LESS: Outstanding Check 130,005.00
14,679.00
ADJUSTED BALANCE P 115,326.00

P
ADD: Borrowings 10% Note P 72,166.00
40,000.00
Book Error 9,810.00
TOTAL 49,810.00
P
LESS: Service Charge P 121,976.00
250.00
DAIF Check 6,400.00
ADJUSTED BALANCE 6,650.00
P 115,326.00
Jul 31 Miscellaneous Expense P 250
Cash P 250
To record bank charge

31 Cash 40,000
Notes Payable 40,000
To record borrowing from bank (10% note)

31 Accounts Receivable 6,600

Cash 6,400
Sales Discounts 200
To record DAIF Check from Markado

31 Cash 9,810
Repairs Expense 9,810
To correct overstatement of payment
 Problem #7
 The bank reconciliation made by Consolacion Song
SuperCat on Aug. 31, 2015, showed a deposit in transit of
P12,800; and outstanding checks no. 597 for P8,300 and
no. 603 for P6,400.
 The bank statement and details from the cash receipts
and cash disbursement journals are provided in the next
slides.
 The adjusted balance per books on Aug. 31 was P141,100.
 In reviewing checks returned by the bank, the bookkeeper
discovered that the check no. 612, written for advertising
expense, was recorded in the cash disbursement journal
as P7,460.
 The DAIF check for P10,280, which Consolacion Song
SuperCat deposited on Sept. 24, was a payment on
account from Matnog Freight Express.
 Required: Prepare the bank reconciliation at Sept. 30,
2015 and the journal entries.
Bank Statement
List of Deposits Made & Checks Written
Problem #7 Bank Reconciliation
The bank reconciliation made by
Consolacion Song SuperCat on Aug. 31,
2015, showed a deposit in transit of
P12,800; and outstanding checks no.
597 for P8,300 and no. 603 for P6,400.
BEGINNING 8,300 + 6,400 =
BALANCE 14,700
The adjustedbalance per books on
Aug. 31 was P141,100.
BEGINNING BOOK BALANCE

Required: Prepare the bank

reconciliation at Sept. 30, 2015 and the
journal entries.
 Problem #7
Bank Reconciliation
The details of the bank statement
are available for Sept.

A list of deposits made and checks

written during September, taken
from the cash receipts journal and
cash disbursements journal.
SOURCE DOCUMENTS
(Breakdown)
Problem #7 ANALYSIS & SOLUTIONS

In reviewing checks returned by the

bank, the bookkeeper discovered
that the check no. 612, written for
advertising expense, was recorded
in the cash disbursement
BOOK ERRORjournal
(compareas
to
P7,460. the actual disbursement)

The DAIF check for P10,280, which

Consolacion Song SuperCat
deposited on Sept. 24, was a
BOOK –
payment on account from Matnog
Freight Express.
 Bank Statement

BOOK ERROR

P
BOOK –
86,020
DEPOSITS credited P Unadjuste
by the bank (if all
amounts were
70,540
CHECKS d BANK
debited by BALANCE
included in
the bank
 List of Deposits Made & Checks Written
DEBITS in CREDITS in
CASH CASH

+ to
to compute DIT co
– mp
ute
BEGINNING BOOK BALANCE (CASH) = P
OC
141,100
UNADJUSTED BOOK BALANCE = P 150,000
 Deposit in Transit – Aug. 31 P
12,800
ADD: Deposits made
TOTAL83,020 P 95,820
LESS:Deposits credited by the bank
86,020
Deposit in Transit – Sept. 30 P
9,800

Outstanding Check – Aug. 31 P

14,700
ADD: Checks written (74,120 – 720*)
TOTAL73,400 P 88,100
LESS:Checks debited by the bank
70,540 Check – Sept. 30
Outstanding P
17,560
*CHECK # 612 BOOK
ERROR
Deposit in
Transit
BANK STATEMENT

DIT – Aug
31

Deposit in Transit
– Sept 30
Outstanding
Check
Beginning #597 P 8,300
(Aug 31) #603 P BANK STATEMENT
6,400

erro
r

6,400 + DAI
3,100 + F
SC
3,860
P17, +
560
4,200
(Outstanding Check –
 P 147,840
ADD: Deposit in Transit 9,800
TOTAL P 157,640
LESS: Outstanding Check
17,560
ADJUSTED BALANCE P 140,080

P
ADD: Book Error (#612) 150,000
720
TOTAL P 150,720
LESS: Service Charge P 360
DAIF Check 10,280
ADJUSTED BALANCE P 10,640
140,080
Sep 30 Miscellaneous Expense P 360
Cash P 360
To record bank charge

30 Cash 720
Advertising Expense 720
To correct overstatement of payment

30 Accounts Receivable 10,280

Cash 10,280
To record DAIF Check from Matnog
END…