Teacher’s Activity Student’s Response

2. Application
CORBITO, Athenea Satlene Joy S.

1. Francine Co. received their August

20x2 bank statement. The August 31,
20x2 cash balance in their accounting
books is ₱570,000 while the cash balance
shown on the bank statement is ₱460,000.
Relevant information follows:

a. Check No. 1234 for ₱95,000,

issued to a supplier, is not yet
presented to the bank for payment.

b. A ₱255,000 check deposit, with

deposit slip no. 0911, is not yet
credited to Francine Co. account.

c. A customer deposited ₱110,000 to

Francine Co. bank account. They
have not yet recorded this
collection of account receivable in
their accounting books.

d. The bank paid ₱60,000 monthly

mobile phone charges directly out
of their account.

Requirement is to prepare the bank

reconciliation.

But, first, let’s identify the treatments for

each of the relevant information. Julie Ann:

What is your analysis about the item “a”? Ma’am for item a, the ₱95,000 is an outstanding
Eme emeng raise hand kayo. check.
Okay Miss, Julie Anne.

Very Good! How about the item “b”? Item b, amounting to ₱255,000 is a deposit in
transit, ma’am.

Correct! And these items are example of These are reconciling Items per Bank, ma’am.
what kind of reconciling items?
That’s correct! How about the remaining Item c, ₱110,000 is a credit memo ma,am while
items? item d ₱60,000 deduction is a debit memo.

That’s right! And items c and d are

examples of Book Reconciling Items.
Thank you, Miss Julie Anne.

Since we are done with the analyses, who

can now solve the adjusted balance using
the Pro forma bank reconciliation?
Raise hand ulit lol Mary Ann:
Okay, Miss Mary Ann:

MISS :
Moving on to the next problem. Who
Cassie Inc. cash general ledger balance as of
wants to read the problem.
December 31, 20x1 is ₱143,000. The bank
Raise hand eme ulit.
statement at Bank of Mondragon (BOM) for the
Okay, Miss Shiela
same period shows an ending balance of
Pero in case, di pumayag si Shile pwedeng
₱180,000.
pabasa na rin ito Sop? HAHAHAH tyyyy
• A deposit of ₱32,000 that Cassie mailed
December 31 does not appear on the
bank statement.
• Checks written in December but not
clear the bank statements are:
Check No. 6233 ₱18,000
Check No. 6234 7,500
Check No. 6235 1,500
• Bank service charge of ₱2,000 are not
recorded in Cassie’s books.
• The bank returned one of Cassie’s
customer’s checks for ₱58,000 with the
bank statement, marked “NSF.”
• Cassie discovered that a collection of
₱430,000 was recorded in the books as
₱340,000. The bank statement shows the
correct amount of ₱430,000.
 • The bank erroneously credited a ₱12,000
deposit of Carrel Co. to Cassie’s
account.

The REQUIREMENT IS TO PREPARE

A BANK RECONCILATION. First,
we’re going to identify the items that
constitute timing differences. Notice
whether it affects the cash or the bank Sophia:
balance and determine whether it needs to
be added or deducted. Ma’am, the first bullet, the P32,000 is a deposit
in transit and it should be added in the bank
Okay for the first bullet: balance.
Raise hand eme ulit
Miss Sophia It is an outstanding check, ma’am. And
outstanding checks are deducted in the bank
Correct! How about the next bullet? What balance, ma’am.
do you think is the treatment for this item?

Exactly! We have a total outstanding

checks amounting to ₱27,000 (₱18,000 + Roxy:
₱7,500 + ₱1,500). No ma’am. Bank service charge is already
reflected in the bank balance. It is a Debit Memo
How about the bank service charge? Is it and should be deducted in the book balance
a reconciling item per bank balance? since it is stated that it is not yet recorded.
Raise hand eme ulit
Yes, Miss Roxy Ma’am NSF Checks is also a Debit Memo that
should be deducted in the book balance. With
this ma’am we now have a total Debit Memo of
₱60,000 (₱2,000 + ₱58,000)
How about the NSF checks?
For the book error ma’am there is an
understatement of ₱90,000. And the bank error
Correct! Now, moving on to the errors. results in an overstatement of ₱12,000.
How much should be recorded as book
error and bank error?
Raise hand eme serye
Okay, Miss Merryl.

Very good! Since the balance per book iis

understated. The correction is an addition
of ₱90,000 (₱430,000 - ₱340,000).
Meanwhile, the overstatement in the
balance per bank of ₱12,000 is a Merryl:
deduction.

Since we are done analyzing each items,

we can now prepare a bank reconciliation
statement Miss Merryl.

That’s correct and thank you miss Merryl!