CHAPTER 16 BANK RECONCILIATION Comprehensive problems Problem 16-1 (PHILCPA Adapted) Divine Company prepared the following bank reconciliation on December 31: Balance per bank statement 2,800,000 Add: Deposit in transit 195,000 Checkbook printing charge 5,000 Error made by Divine in recording check issued in December 35,000 NSF check 110,000 _ 345,000 Total 3,145,000 Less: Outstanding check 100,000 Note collected by bank including, P15,000 interest 215,000 315,000 Balance per book 2,830,000 The entity had cash on hand P500,000 and petty cash fund P50,000 on December 31. e , 1. What amount should be reported as cash in bank at year-end? a. 2,930,000 b. 3,095,000 c. 2,895,000 d. 3,130,000 2. What total amount of cash should be reported at year-end? 3,395,000 3,350,000 3,445,000 3,380,000 Be oP 173 Scanned with CamScannerSolution 16-1 Question 1 Answer c Balance per bank Deposit in transit Outstanding. check Adjusted cash in bank Balance per book Note collected by bank NSF check Book error Checkbook printing charge Adjusted cash in bank Question 2 Answer c Adjusted cash in bank Cash on hand Petty cash fund Total cash 2,800,000 195,000 (_100,000) 2,895,000 2,830,000 215,000 ( 110,000) ( 35,000) (5,000) 2,895,000 2,895,000 500,000 50,000 3,445,000 174 Scanned with CamScannerProblem 16-2 (IAA) Ron Company provided the following data for the month of January: Balance per book, January 31 3,130,000 Balance per bank statement, January 31 3,500,000 Collections on January 31 but undeposited 550,000 NSF check received from a customer returned-by the bank on February 5 with.the January bank statement 50,000 _ Checks outstanding on January 31 650,000 Bank debit memo for safety deposit box rental not recorded by depositor 5,000 A creditor check for P30,000 was incorrectly recorded in the depositor’s book as 300,000 A customer check for P200,000 was recorded by the depositor as 4 20,000 . The depositor neglected to make an entry for a check drawn in payment of an account payable 125,000 What amount should be reported as adjusted cash in bank on January 31? a. 3,130,000 b. 3,500,000 c. 3,400,000 - d. 2,950,000 Solution 16-2 Answer c Balance per book 3,130,000 Overstatement of creditor check 270,000 Understatement of customer check 180,000 NSF check . (50,000) Bank debit memo for safety deposit box (5,000) Unrecorded check \ (125,000) Adjusted book balance 3,400,000 Balance per bank 3,500,000 Undeposited collections 7 550,000 Checks outstanding . (650,000) Adjusted bank balance 3,400,000 175 Scanned with CamScannerProblem 16-3 (IAA) In reconciling the cash balance on December 31 with that shown in the bank statement, Sam Company provided the following information: Balance per bank statement 4,000,000 Balance per 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 Sam Company’s books 940,000 . Customer check charged back by bank for absence of counter signature 50,000 Deposit of P100,000 incorrectly recorded by bank as 10,000 Check of Sim Company charged by bank against Sam account . 150,000 Customer note collected by bank in favor of Sam Company. Face 400,000 Interest 40,000 Total 440,000 . Collection fee 5,000 435,000 Erroneous debit memo of December 28, to charge Sam account with settlement of bank loan 200,000 Deposit of Sim Company credited to Sam account 300,000 . What amount should be reported as adjusted cash in bank on December 31? 4,315,000 3,925,000 3,075,000 4,015,000 peop Scanned with CamScannerSolution 16-3 Answer d Balance per book Add: Proceeds of bank loan 940,000 Customer note collected by bank 435,000 Total Less: Service charge 10,000 Customer check charged back 50,000 Adjusted book balance Balance per bank Add: Deposit in transit 475,000 Incorrect deposit 90,000 Erroneous bank charge 150,000 Erroneous debit memo 200,000 Total - Less: Outstanding checks 600,000 Erroneous bank credit 300,000 Adjusted bank balance 177° Scanned with CamScanner 2,700,000 1,375,000 4,075,000 60,000 4,015,000 4,000,000 915,000 4,915,000 900,000Problem 16-4 (JAA) Susan Company showed the following information on August 31: Balance of cash in bank account 1,300,000 Balance of bank statement : 1,200,000 Outstanding checks, August 31: , Number 555 . 10,000 761 . 55,000 162 _ 40,000 763 25,000 764 , 65,000 765 70,000 Receipts of August 31, deposited September | 275,000 Service charge for August 5,000 NSF check received from a customer 85,000 The cashier-bookkeeper had misappropriated P30,000 and. an additional P10,000 by.charging sales discounts and crediting accounts receivable. The stub for check number 765 and the invoice relating thereto showed that it was for P50,000. It was recorded incorrectly in the cash disbursements journal as P70,000. This check was drawn in payment of an account payable. . : Payment has been stopped on check number 555 which was drawn in payment of an account payable. The payee cannot be located. What is the adjusted cash in bank on August 31? a. 1,240,000 b. 1,230,000 ce. 1,210,000 d. 1,200,000 “178 Scanned with CamScannerSolution 16-4 Answer a Balance per book Add: Overstatement of check number 765 20,000 Check number 555 stopped for payment 10,000 Total Less: Service charge 5,000 NSF check \ 85,000 Adjusted book balance Company check number 765 Recorded by depositor Overstatement of payment Balance per bank Add: Undeposited collections Total Less: Outstanding checks: Number 761 55,000 762 40,000 763 25,000 764 65,000 765 . 50,000 Adjusted bank balance . 179 Scanned with CamScanner 1,300,000 30,000 1,330,000 90,000 1,240,000 50,000 70,000 20,000 1,200,000 * _ 275,000 1,475,000 “335,000 1,240,000Problem 16-5 (PHILCPA Adapted) Mcbride Company provided the following data pertaining to the cash transactions and bank account for the month of May: Cash balance per accounting record €ash balance per bank statement ~Bank service charge Debit memo for the cost-of printed checks delivered by the bank; the charge has not been recorded in the accounting record _—Qutstanding checks Deposit of May 30 not recorded by bank until June 1 —Proceeds of a bank loan on May 30, not recorded in the accounting record, net of interest of P30,000 ~Proceeds from a customer promissory note, principal amount P800,000 collected by the bank not taken up in the accounting record with interest ~Check No. 1086 issued to a supplier entered in the accounting record as P210,000 but deducted in the bank statement at an erroneous amount of Stolen check lacking an authorized signature deducted from Mebride’s account by the bank in error —Customier check returned by the bank marked NSF, indicating that the customer balance was not adequate to cover the check; no entry has been made in the accounting. record to record the returned check . ” Whats the adjusted cash in bank? 3,000,000 2,910,000 3,080,000 2,990,000 Bese 180 Scanned with CamScanner 1,719,000 3,195,000. ‘{10,000) 12,000 685,000) 500,000 t 570,000 810,000 (120,000) 80,000 pae\\Solution 16-5 Answer a ‘Balance per book $ervice charge Debit memo for printed checks Proceeds of bank loan Proceeds of customer note NSF customer check Adjusted book balance Balance per bank Outstanding checks Deposit in transit Bank error in recording check Stolen check deducted by bank in error Adjusted bank balance 181 Scanned with CamScanner 1,719,000 (10,000) (12,000) 570,000 810,000 (__77,000) 3,000,000 3,195,000 ( 685,000) 500,000 ( *90,000) 80,000 3,000,000Problem 16-6 (AICPA Adapted) Carefree Company prepared the following bank reconciliation on March 31: Book balance : 1,405,000 Add: Deposit in transit 750,000 Collection of note 2,500,000 Interest on note _150,000 3,400,000 Total r 4,805,000 Less: Careless Company deposit credited to our account 1,100,000 Bank service charge 45,000 1,145,000 Adjusted book balance 3,660,000" Bank balance 5,630,000 Add: Error by depositor on recording check 45,000 Total 5,675,000 Less:. Preauthorized payments for water bills 205,000 NSF customer check 220,000 Outstanding checks i 1,650,000 Adjusted bank balance The check erroneously recorded by the depositor was made for the proper amount of P249,000 in payment ef account. However it was entered in the cash payments journal as P294,000. The entity authorized the bank to automatically pay its water bills as submitted directly to the bank. . What amount should be teporied as cash in bank on March 312 3,660,000 3,600,000 3,630,000 2,880,000 aeosP 182 Scanned with CamScannerSolution 16-6 Answer c Book balance Collection of note Interest on note Book error on recording check Bank service charge Water bills paid directly by bank NSF customer check Adjusted book balance Company check Recorded by depositor Book error — overstatement of a payment Bank balance Deposit in transit Outstanding checks Bank error — Careless Company deposit erroneously credited Adjusted bank balance 183 Scanned with CamScanner 1,405,000 “2,500,000 150,000 45,000 (45,000) ( 205,000) (220,000) 3,630,000: 249,000 294,000 45,000 5,630,000 750,000 (1,650,000) (1,100,000) 3,630,000