Company R maintains cash in BTS Bank.

The following information was made available for the month of May
2022:
 The bank statement at the end of the month shows ₱100,000.
 Deposits not yet reflected in the bank statement, ₱840,000.
 Checks issued but not yet encashed but the holders are already recorded as a credit to the cash-in-bank,
₱650,000.
 The bank made an error of debiting the account of Company R which was actually a debit for Company
S, ₱40,000.
 The ledger shows a cash-in-bank balance of ₱120,000.
 Notes receivable collected by the bank for Company R amounted to ₱160,000.
 Interest earned by Company R from keeping their cash at BTS Bank is ₱50,000.
 BTS bank charged Company R ₱10,000 service charges directly debited to their account as seen in the
bank statement.
 Company R received a check from Company T amounting to ₱70,000 but it was drawn against
insufficient funds/DAIF/NSF.
 There was a bank-related transaction that erroneously credited the ledger balance of cash-in-bank
account amounting to ₱80,000.
Prepare BRSs using the three methods.
Adjusted Balance Method:
COMPANY R
Bank Reconciliation Statement
May 31, 2022

Balance per Bank ₱100,000.00

Add: Deposits in Transit ₱840,000.00
Error in debiting the account 40,000.00 880,000.00
Total 980,000.00
Less: Outstanding Checks 650,000.00
Adjusted Balance per Bank ₱330,000.00

Balance per Book ₱120,000.00

Add: Notes collected by the bank ₱160,000.00
Interest earned 50,000.00
Error in crediting 80,000.00 290,000.00
Total 410,000.00
Less: Bank Service Charge ₱10,000.00
DAIF/NSF Check 70,000.00 80,000.00
Adjusted Balance per Book ₱330,000.00
Bank-to-Book Method:
COMPANY R
Bank Reconciliation Statement
May 31, 2022

Balance per Bank ₱100,000.00

Add: Deposits in Transit ₱840,000.00
Error in debiting the account 40,000.00
Bank Service Charge 10,000.00
DAIF/NSF Check 70,000.00 960,000.00
Total 1,060,000.00
Less: Outstanding Checks ₱650,000.00
Notes collected by the bank 160,000.00
Interest earned 50,000.00
Error in crediting 80,000.00 940,000.00
Balance per Book ₱120,000.00
Adjusting Entries:

Account Name Debit Credit

CIB ₱160,000.00
Notes Receivables ₱160,000.00
To record an adjusting entry for the Notes Receivable collected by
the bank for Company R

Account Name Debit Credit

CIB ₱50,000.00
Interest income ₱50,000.00
To record an adjusting entry for the interest income earned in
BTS Bank for May 2022

Account Name Debit Credit

CIB ₱80,000.00
Miscellaneous account ₱80,000.00
To record an adjusting entry for the bank-related transaction that
erroneously credited the ledger balance of cash-in-bank account

Account Name Debit Credit

Bank Service Charges ₱10,000.00
CIB ₱10,000.00
To record an adjusting entry for the service charges directly
debited by the bank to the account

Account Name Debit Credit

Accounts Receivable ₱70,000.00
CIB ₱70,000.00
To record an adjusting entry for the check drawn against
insufficient funds/DAIF/NSF.