Sample Problems

BANK RECONCILIATION
PROBLEM 8-2
Apathy Company provided the following information:
Apathy Company
Date Check no. Withdrawal Deposits Balance
Dec. 2 100,000 100,000
18 104 10,000 90,000
20 101 5,000 85,000
22 106 25,000 60,000
27 50,000 110,000
29 10,000 120,000
29 103 40,000 80,000
29CM 30,000 110,000
31Service charge DM 2,000 108,000
PROBLEM 8-2
Apathy Company provided the following information:
FIRST BANK
Dec. 1 Deposit 100,000 Dec. 4 Check No. 101 5,000
21 Deposit 50,000 6Check No. 102 15,000
27 Deposit 10,000 8Check No. 103 40,000
31 Deposit 80,000 8Check No. 104 10,000
10Check No. 105 30,000
14Check No. 106 25,000
28Check No. 107 50,000
PROBLEM 8-2
The credit made by the 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.

REQUIRED:
a. Prepare a bank reconciliation using adjusted balance
method.
b. Prepare the adjusting entries.
PROBLEM 8-2 Apathy Company
Date Check no. Withdrawal Deposits Balance
Dec. 2 100,000 100,000
18 104 10,000 90,000
20 101 5,000 85,000
22 106 25,000 60,000
27 50,000 110,000
29 10,000 120,000
29 103 40,000 80,000
29 CM 30,000 110,000
31 Service charge DM 2,000 108,000

FIRST BANK
Dec. 1 Deposit 100,000 Dec. 4 Check No. 101 5,000
21 Deposit 50,000 6 Check No. 102 15,000
27 Deposit 10,000 8 Check No. 103 40,000
31 Deposit 80,000 8 Check No. 104 10,000
10 Check No. 105 30,000
14 Check No. 106 25,000
28 Check No. 107 50,000
PROBLEM 8-2
Adjusting entries:
Dec. 31 Cash in bank 30,000
Notes receivable 30,000
#

Bank service charge 2,000

Cash in bank 2,000
#
PROBLEM 8-2 Apathy Company
Bank Reconciliation
December 31, 20A

Book balance 65,000

Add: Credit memo from note collected 30,000
Total 95,000
Less: Debit memo (service charge) (2,000)
Adjusted book balance 93,000

Bank balance 108,000

Add: Deposit in transit 80,000
Total 188,000
Less: Outstanding checks
No. 102 15,000
No. 105 30,000
No. 107 50,000 (95,000)
Adjusted bank balance 93,000
PROBLEM 8-3
The following ledger account is a copy of the bank account in the
ledger of Sensible Company.
Second Bank
Dec Dec Check
. 1 Balance 100,000 . 1 no. 771 20,000
6 Deposit 30,000   4 772 5,000
12 Deposit 40,000   6 773 35,000
24 Deposit 50,000   10 774 15,000
31 Deposit 30,000   14 775 30,000
  18 776 25,000
  24 777 40,000
PROBLEM 8-3
The following bank statement was received from the Second Bank
by Sensible Company.
Date Checks Deposits Balance
Dec. 1 Balance 130,000
Check no. 768 10,000
1 771 20,000
4 772 5,000
6 773 35,000 30,000
12 774 15,000 40,000
12 776 52,000
104
24 2 8,000 50,000
28 NSF Check 10,000 45,000CM
28 Service charge 5,000
PROBLEM 8-3
Other information
1. Sensible Company reconciled its bank balance on November 30 with two
checks, No. 768 for P10,000 and No. 770 for P20,000 outstanding.
2. Check no. 1042 was drawn by Sensitive Company.
The bank charged it in error to the account of Sensible Company.
3. Check No. 776 was incorrectly drawn for P52,000 in payment of an account.
The amount P25,000 was entered in the books of original entry.
4. The bank credit on December 28 represents the proceeds of a P50,000
note, less a collection fee of P5,000 collected by the bank and credited to
the account.
5. The NSF check was received from a customer in payment of an account.

Required:
a. Prepare a bank reconciliation statement on December 31.
b. Prepare adjusting entries on December 31.
PROBLEM 8-3
Second Bank
Dec. 1 Balance 100,000 Dec. 1 Check no. 771 20,000
6 Deposit 30,000   4 772 5,000
12 Deposit 40,000   6 773 35,000
24 Deposit 50,000   10 774 15,000
31 Deposit 30,000   14 775 30,000
  18 776 25,000
  24 777 40,000
Date Checks Deposits Balance
Dec. 1 Balance 130,000
Check no. 768 10,000
1 771 20,000
4 772 5,000
6 773 35,000 30,000
12 774 15,000 40,000
12 776 52,000
24 1042 8,000 50,000
28 NSF Check 10,000 45,000CM
28 Service charge 5,000
 Sensible Company
PROBLEM 8-3 Bank Reconciliation
December 31, 20A

Book balance 110,000

Add: Credit memo from note collected 45,000
Total 155,000
Less: Debit memo (service charge) (5,000)
NSF Check (10,000)
Book error (52,000-25,000) (27,000) (42,000)
Adjusted book balance 113,000

Bank balance 135,000

Add: Deposit in transit 60,000
Erroneous bank debit 8,000 68,000
Total 203,000
Less: Outstanding checks
No. 770 (20,000)
No. 775 (30,000)
No. 777 (40,000) (90,000)
PROBLEM 8-3
Adjusting entries:
Dec. 31 Cash in bank 45,000
Bank service charge 5,000
Notes receivable 50,000
#

31 Bank service charge 5,000

Accounts receivable 10,000
Accounts payable 27,000
Cash in bank 42,000
#
PROBLEM 8-4
Xanthous Company provided the following bank
reconciliation on January 31 of the current year:

Bank balance 300,000

Add Deposit in transit 600,000
Total 900,000
Deduct Outstanding checks:
No. 114 240,000
115 160,000
116 60,000 460,000
Adjusted bank balance 440,000
All receipts of cash are deposited in the bank account. The bank
statement for the month of February is presented below:
THIRD BANK
Checks Deposit Date Balance
Balance forwarded Jan. 31 300,000
240,000 600,000 Feb. 1 660,000
2,000,000 3 2,660,000
200,000 5 2,460,000
900,000 400,000 7 1,960,000
160,000 9 1,800,000
1,000,000 10 2,800,000
500,000 13 2,300,000
1,200,000 16 3,500,000
1,300,000 21 4,800,000
550,000 23 4,250,000
5,000SC 24 4,245,000
1,000,000 550,000 27 3,795,000
800,000 270,000CM 28 3,265,000
PROBLEM 8-4
The following information was taken from
the credit memo of February 28:

Face of the note 250,000

Interest on the note 30,000
Maturity value of the note 280,000
Collection charge 10,000
Credit to your account 270,000
The following data were taken from
the cash journals of Xanthous
Company:
Date
Cash Receipts Journal
Debit Cash
Cash Disbursement Journal
Check No. Credit Cash
Feb. 2 2,000,000 117 200,000
6 400,000 118 900,000
9 800,000 119 800,000
10 200,000 120 500,000
15 1,200,000 121 550,000
20 1,300,000 122 180,000
24 550,000 123 1,000,000
28 450,000 124 120,000
6,900,000 125 250,000
4,500,000
REQUIRED:

a. Prepare bank reconciliation on

February 28, showing the book
balance before and after adjustment.
b. Prepare journal entries to record the
adjustments that are indicated by
the bank reconciliation.
 Xanthous Company
Bank Reconciliation
February 28, 20A
Balance per book 2,840,000
Add: CM for note collected 270,000
Total 3,110,000
Less: DM for service charge 5,000
Adjusted book balance 3,105,000

Balance per bank 3,265,000

Add: Deposit in transit 450,000
Total 3,715,000
Less: Outstanding checks
No. 116 60,000
122 180,000
124 120,000
125 250,000 610,000
Adjusted bank balance 3,105,000
ADJUSTING ENTRIES
a) Cash in bank 270,000
Bank service charge 10,000
Note Receivable 250,000
Interest Income 30,000
#

b) Bank Service charge 5,000

Cash in Bank 5,000
#
PROBLEM 8-5
Adept Company provided the following data for the month of December of the current
year:

Balance per book 5,000,000

Balance per bank 4,,450,000
Deposit in transit 3,000,000
Outstanding check 850,000
Bank service charge for the month of December50,000
Customer’s check returned by bank marked “NSF” 500,000
Customer’s note collected by bank
Face, P2,000,000; Interest, P200,000;
Collection fee, P50,0002,150,000

Required:
a. Prepare a bank reconciliation on December 31.
b. Prepare adjustments to correct the cash balance per book.
PROBLEM 8-5 Adept Company
Bank Reconciliation
December 31, 20A

Book balance 5,000,000

Add: Credit memo from note collected by bank 2,150,000
Total 7,150,000
Less: Debit memo (service charge) (50,000)
NSF Check (500,000) (550,000)
Adjusted book balance 6,600,000

Bank balance 4,450,000

Add: Deposit in transit 3,000,000
Total 7,450,000
Less: Outstanding checks (850,000)
Adjusted bank balance 6,600,000
ADJUSTING ENTRIES
a) Cash in bank 2,150,000
Bank service charge 50,000
Note Receivable 2,000,000
Interest Income 200,000
#

b) Bank Service charge 50,000

Accounts receivable 500,000
Cash in Bank 550,000
#
PROBLEM 8-6
Chivalry Company prepared the following bank reconciliation on
Book balance 1,405,000
March 31:
Add: March 31 deposit
Collection of note 750,000
Interest on note 2,500,000
150,000 3,400,000
Total 4,805,000
Less: Calvary Company's deposit
to our account 1,100,000
Bank service charge 5,000 1,105,000
Adjusted book balance 3,700,000
Bank balance 5,630,000
Add: Error on check No. 175 45,000
Total 5,675,000
Less: Preauthorized payment for
light and water 245,000
NSF check 220,000
Outstanding checks 1,650,000 2,115,000
3,560,000
Check No. 175 was made for the proper amount of 249,000 in payment of
account. However it was entered in the cash disbursement journals as
294,000.
Chivalry Company authorized the bank to automatically pay its light and water
bills as submitted directly to the bank.

REQUIRED:
a. Prepare the corrected bank
reconciliation.
b. Prepare the adjusting entries on
March 31.
 Chivalry Company
Bank Reconciliation
March 31, 20A
Book balance 1,405,000
Add: Collection of note 2,500,000
Interest on note 150,000
Book error on check no. 175 45,000 2,695,000
Total 4,100,000
Less: Bank service charge 5,000
Payment for light and water 245,000
NSF check 220,000 470,000
Adjusted book balance 3,630,000

Bank balance 5,630,000

Add: Deposit in transit 750,000
Total 6,380,000
Less: Bank error 1,100,000
Outstanding checks 1,650,000 2,750,000
Adjusted bank balance 3,630,000
ADJUSTING ENTRIES
a) Cash in bank 2,695,000
Note Receivable 2,500,000
Interest Income 150,000
Accounts payable 45,000

b) Bank Service charge 5,000

Light and water 245,000
Accounts receivable 220,000
Cash in Bank 470,000
 PROBLEM 8-7
Zodiac Company provided the following information :
Balance per book, March 31 800,000
Cash Receipts for April 4,100,000
Cash Disbursements for April 3,800,000
Outstanding checks as of April 30
of which No. 1333 had been certified :
No.1331 40,000
No.1332 30,000
No.1333 50,000
No.1334 60,000
No.1335 10,000
April debit memos were :
For bank service charge 5,000
For NSF check 25,000
April Credit Memo for note collected
REQUIRED
Prepare a Bank Reconciliation on April 30 following the book to
bank approach and prepare adjusting entries .
 Zodiac Company
Bank Reconciliation
March 31, 20A
Balance per book – April 30 1,100,000
Add: Credit memo for note collected 60,000
Outstanding checks :
NO.1331 40,000
NO.1332 30,000
NO.1334 60,000
No.1335 10,000 140,000
TOTAL 1,300,000

Less: Bank Service Charge 5,000

NSF Check 25,000
Undeposited collections 270,000 (300,000)
Adjusted balance per bank-April 30 1,000,000
ADJUSTING ENTRIES
a) Cash in Bank 60,000
Note Receivable 60,000

b) Bank Service charge 5,000

Accounts Receivable 25,000
Cash in Bank 30,000
PROBLEM 8-8
 PROBLEM 8-9
Rancor Company provided the following information for the month of
December:
Balance per bank statement 4,000,000
Balance per cash book 2,700,000
Outstanding checks 600,000
Deposit in transit 475,000
Service charge 10,000
Proceeds of bank loan, December 1 discounted for 6 months at
12%, not recorded on company books 940,000
Customer's check charged back by bank for absence of counter
signature 50,000
Deposit of 100,000 incorrectly recorded by bank as 10,000

Check of Rancid Company charged by bank against Rancor

Company account 150,000
Customer's note collected by bank in favor of Rancor Company.

Face 400,000
Interest 40,000
Total 440,000
Less: Collection fee 5,000 435,000
Erroneous debit memo of December 28, to charge company's
account with settlement of bank loan 200,000
Deposit of Rancid Company credited to Rancor account 300,000
REQUIRED
a. Prepare a bank reconciliation using the adjusted balance
approach.
b. Prepare adjusting entries on December 31.
 RANCOR COMPANY
BANK RECONCILIATION
DECEMBER 31, 20A
Balance per book 2,700,000
Add: Proceeds of bank loan 940,000
Note collected by bank 435,000 1,375,000
Total 4,075,000
Less: Service charge 10,000
Customer’s check charged back 50,000 60,000
Adjusted book balance 4,015,000

Balance per bank 4,000,000

Add: Deposit in transit 475,000
Incorrect deposit 90,000
Erroneous bank charge 150,000
Erroneous debit memo 200,000 915,000
Total 4,915,000
Less: Outstanding checks 600,000
Erroneous bank credit 300,000 900,000
Adjusted bank balance 4,015,000
ADJUSTING ENTRIES
a) Cash in bank 1,375,000
Bank service charge 5,000
Interest expense (60,000 x 1/6) 10,000
Prepaid interest expense 50,000
Loan payable (940,000/94%) 1,000,000
Note receivable 400,000
Interest income 40,000

b) Bank service charge 10,000

Accounts receivable 50,000
Cash in bank 60,000
PROBLEM 8-10
PROBLEM 8-11
PROBLEM 8-12
Magnificent Company
Cash balance per accounting record provided the following data for the month of1,719,000
May:
Cash balance per bank statement 3,195,000
Bank service charge 10,000
Debit memo for the cost of printed checks delivered
by the bank; the charge has not been recorded
in the accounting record 12,000
Outstanding checks 685,000
Deposit of May 30 not recorded by bank until June 1 500,000
Proceeds of a bank loan on May 30 not recorded
in the accounting record, net of interest of 30,000 570,000
Proceeds from a customer's promisory note,
principal amount P800,000 collected by the
bank not taken up in the book with interest 810,000
Check No. 1086 issued to a supplier entered
in the accounting record as P210,000 but deducted
in the bank statement at an erronous amount of 120,000
Stolen check lacking an authorized signature, deducted
from the entity's account by the bank in error 80,000
Customer's check returned by the bank marked NSF,
indicating that the customer's balance was not
adequate to cover the check; no entry has been made
in the accounting record to record the returned check 77,000
REQUIRED
a. Prepare a bank reconciliation statement.
b. Prepare adjusting entries.
 Magnificent Company
Bank Reconciliation
May 31, 20A
Balance per book 1,719,000
Add: Proceeds of bank loan 570,000
Proceeds of customer's note 810,000 1,380,000
Total 3,099,000
Less: Bank service charge 10,000
Debit memo for printed checks 12,000
NSF check 77,000 99,000
Adjusted book balance 3,000,000

Balance per bank 3,195,000

Add: Deposit in transit 500,000
Stolen check deducted by bank in error 80,000 580,000
Total 3,775,000
Less: Outstanding checks 685,000
Bank error in recording 90,000 775,000
Adjusted bank balance 3,000,000
ADJUSTING ENTRIES(PLS EDIT)
a) Cash in bank 1,375,000
Bank service charge 5,000
Interest expense (60,000 x 1/6) 10,000
Prepaid interest expense 50,000
Loan payable (940,000/94%) 1,000,000
Note receivable 400,000
Interest income 40,000

b) Bank service charge 10,000

Accounts receivable 50,000
Cash in bank 60,000