Bank Reconciliation:

Unadjusted to Adjusted Balances Format

FERMIN COMPANY's check register shows the following entries for the month of December:

Date Checks Deposits Balance

2018

Dec. 1 Beginning Balance P 89,300

5 Deposit P 65,000 154,300

7 Check #14344 P 32,500 120,800

11 Check # 14345 14,000 106,800

26 Deposit 49,000 155,800

29 Check #14346 8,600 147,200

Fermin's bank reconciliation for November revealed one outstanding check (No. 14343) for P
12,000

(written on November 28)) and one deposit in transit for P5,550 (made on November 29).

The following is from Fermin's bank statement for December 2018:

Date Checks Deposits Balance

2018

Dec. 1 Beginning Balance P950,750

1 Deposit P 5,550 101,300

4 Check No. 14344 P32,500 68,800

5 Deposit 56,000 124,800

14 Check No. 14345 14,000 110,800

15 Loan proceeds 500,000 610,800

20 NSF check 7,600 603,200

29 Service charge 1,000 602,200

31 Interest 3,600 605,800

Assume that all errors were committed by Fermin Company, not the bank.
Based on the preceding information, determine the following:

1. Adjusted cash balance on November 30

A, P89,300 C. P102,200

B. P95,750 D. P101,300

2. Outstanding checks on December 31

A. P46,500 C. P8,600

B. P45,500 D. P20,600

3. Deposit in transit on December 31

A. P52,600 C. P5,550

B. P49,000 D. P43,450

4. Total bank receipts in December

A. P114,000 C. P565,150

B. P119,550 D.P 61,550

5. Adjusted cash balance on December 31

A. P663,800 C. P748,200

B. P634,200 D. P597,200

Solution 1-20

1. Balance per bank, Nov. 30 P95,750

Outstanding in check (no. 14343) (12,000)

Deposit transit 5,550

Adjusted bank balance, Nov. 30 P89,300

Answer: A

Since there are no book reconciling items in November, the adjusted bank balance agrees with the cash

in bank balance per ledger on November 30.

2. Outstanding checks on December 31:

Check no. 14343 P12,OOO

Check no. 14646 8,600

Total P20,600

Answer: D

3. Deposit in transit on December 31:

Dec. 26 collection P49,000

Answer: B

4. Total bank receipts in December P565,150

Answer: C

The total bank receipts is the tota/ amount credited by the bank during the period.

5. Book Bank

Unadjusted balances P147,200 P605,800

Deposit in transit 49,000

Outstanding checks (see no. 2) (20,600)

Error in recording deposit

(P65,OOO - P56,OOO) (9,000)

Error in arithmetic for Check No. 14344 1,000

Loan proceeds 500,000

NSF check (7,600)

Interest 3,600

Service charge (1,000)

Adjusted balances P634,200 P634,200