GROUP 5

Problem 3: Numbers 6-10

BANK
Reconciliation
To ensure that the cash balances
on entity's books matches the
actual cash they have in the bank
NUMBER 6
The cash account shows a balance of P38,000 before
reconciliation. The bank statement does not include a
deposit of P2,300 made on the last day of the month.
The bank statement shows a collection by the bank of
P940 and a customer’s check for P220 was returned
because it was NSF. A customer’s check for P450
was recorded on the books as P540, and a check
written for P79 was recorded as P97. The correct
balance in the cash account was
 Balance per books, end. P 38,000
The cash Add: Credit memos
account shows Less: Debit memos
a balance of Add/Less: Book errors
P38,000 Adjusted balance
before
reconciliation.
 Balance per books, end. P 38,000
The bank
Add: Credit memos
statement does
Less: Debit memos
not include a
Add/Less: Book errors
deposit of
Adjusted balance
P2,300 made
on the last day
of the month
 The bank Balance per books, end. P 38,000
statement shows Add: Credit memos 940
a collection by
Less: Debit memos
the bank of
P940 and a Add/Less: Book errors
customer’s Adjusted balance
check for P220
was returned
because it was
NSF.
 The bank Balance per books, end. P 38,000
statement shows Add: Credit memos 940
a collection by
Less: Debit memos (220)
the bank of
P940 and a Add/Less: Book errors
customer’s Adjusted balance
check for P220
was returned
because it was
NSF.
 Balance per books, end. P 38,000
Add: Credit memos 940
A customer’s
check for Less: Debit memos (220)
P450 was Add/Less: Book errors
recorded on Adjusted balance
the books as
P540
OVERSTATEMENT

450 - 540 = (90)

 Balance per books, end. P 38,000

A customer’s Add: Credit memos 940

check for Less: Debit memos (220)

P450 was Add/Less: Book errors
recorded on Overstatement (90)
the books as
P540 Adjusted balance
 Balance per books, end. P 38,000

a check Add: Credit memos 940

written for Less: Debit memos (220)

P79 was Add/Less: Book errors
recorded as Overstatement (90)
P97
Adjusted balance

UNDERSTATEMENT

97 - 79 = 18
 Balance per books, end. P 38,000

a check Add: Credit memos 940

written for Less: Debit memos (220)
P79 was Add/Less: Book errors
recorded as Overstatement (90)
P97
Understatement 18
Adjusted balance
 Balance per books, end. P 38,000
Add: Credit memos 940
The correct Less: Debit memos (220)
balance in
the cash Add/Less: Book errors

account Overstatement (90)

was Understatement 18
Adjusted balance P38,648

P38,000 + 940 - 220 - 90 + 18

NUMBER 7
Assume the following facts for Kurt Company:
The month- end bank statement shows

•a balance of P40,000;
•outstanding checks total P2,000;
•a deposit of P8,000 is in transit at month-end;
•and a check for P400 is erroneously charged by the
bank against the account.

What is the correct cash balance at the end of the

month
 Balance per bank statement, end. P 40,000
Add: Deposit in Transit
Less: Outstanding Checks
A balance of
Add/Less: Bank errors
P40,000
Adjusted balance
 Balance per bank statement, end. P 40,000
Add: Deposit in Transit
Less: Outstanding Checks (2000)
outstanding
Add/Less: Bank errors
checks total
Adjusted balance
P2,000
 Balance per bank statement, end. P 40,000
Add: Deposit in Transit 8000
deposit of Less: Outstanding Checks (2000)
P8,000 is in Add/Less: Bank errors
transit at Adjusted balance
month-end
 Balance per bank statement, end. P 40,000
a check for
Add: Deposit in Transit 8000
P400 is
Less: Outstanding Checks (2000)
erroneously
Add/Less: Bank errors 400
charged by
Adjusted balance
the bank
against the
account. Nature of error:
Overstatement in bank debit
 Balance per bank statement, end. P 40,000
Add: Deposit in Transit 8000
What is the
Less: Outstanding Checks (2000)
correct cash
Add/Less: Bank errors 400
balance at
the end of Adjusted balance P46,400

the month

P 40,0000 + 8000 - 2000 + 400

NUMBER 8
In preparing the bank reconciliation of Crews Co. for
the month of July, the following

information is made available:

Balance per bank statement, 7/31 P54,075

Deposits in transit, 7/31 9,375

Outstanding checks, 7/31 8,625

Deposit erroneously recorded by bank to Crews

account, 7/18 375

Bank service charges for July 75

What is the correct cash balance at July 31?

 Balance per bank statement, end. P 54,075
Balance per Add: Deposit in Transit
bank Less: Outstanding Checks
statement, Add/Less: Bank errors
7/31 Adjusted balance

P54,075
 Balance per bank statement, end. P 54,075
Add: Deposit in Transit 9,375

Deposits in Less: Outstanding Checks

transit, 7/31 Add/Less: Bank errors

Adjusted balance
9,375
 Balance per bank statement, end. P 54,075
Add: Deposit in Transit 9,375

Outstanding Less: Outstanding Checks (8,625)

checks, 7/31 Add/Less: Bank errors

Adjusted balance
8,625
 Balance per bank statement, end. P 54,075
Deposit Add: Deposit in Transit 9,375
erroneously
Less: Outstanding Checks (8,625)
recorded by
Add/Less: Bank errors
bank to Crews
Overstatement (375)
account, 7/18
Adjusted balance

375
 Balance per bank statement, end. P 54,075
Add: Deposit in Transit 9,375
Bank service
Less: Outstanding Checks (8,625)
charges for
Add/Less: Bank errors
July
Overstatement (375)

Adjusted balance
75
 Balance per bank statement, end. P 54,075
Add: Deposit in Transit 9,375
What is the
Less: Outstanding Checks (8,625)
correct cash
Add/Less: Bank errors
balance at
Overstatement (375)
July 31?
Adjusted balance P 54,450

P 54,075+ 9,375 - 8,625 - 375

NUMBER 9
In the August 31 bank statement of Kelvin Inc. showed
a balance of P113,000. Deducted in arriving at this
amount was a customer's NSF check for $2,400 that
had been returned. Kelvin had received no prior notice
concerning this check. In addition to the bank
statement, other records showed there were deposits in
transit totaling P17,200 and that outstanding checks
totaled P10,800. What is the cash balance per books at
August 31 prior to adjustments)?
 Balance per bank statement, end. P 113,000
In the August Add: Deposit in Transit
31 bank Less: Outstanding Checks
statement of
Add/Less: Bank errors
Kelvin Inc.
Adjusted balance
showed a
balance of
P113,000.
 Balance per bank statement, end. P 113,000
other records Add: Deposit in Transit 17,200
showed there Less: Outstanding Checks
were deposits
Add/Less: Bank errors
in transit
Adjusted balance
totaling
P17,200
 Balance per bank statement, end. P 113,000

and that Add: Deposit in Transit 17,200

outstanding Less: Outstanding Checks (10,800)

checks totaled Add/Less: Bank errors -

P10,800 Adjusted balance

 Balance per bank statement, end. P 113,000
Add: Deposit in Transit 17,200
Less: Outstanding Checks (10,800)
Adjusted bank Add/Less: Bank errors -
balance Adjusted balance P 119,400

P 113,000 + 17,200 - 10,800

 Balance per bank statement, end. P 113,000
Add: Deposit in Transit 17,200
Less: Outstanding Checks (10,800)
What is the Add/Less: Bank errors -
cash balance Adjusted balance P 119,400
per books at
August 31 Balance per book, end. P
(prior to Add: Credit memo
adjustments)? Less: Debit memo
Add/Less: Bank errors -
Adjusted balance P 119,400
 Balance per bank statement, end. P 113,000
Add: Deposit in Transit 17,200
Less: Outstanding Checks (10,800)
There was a Add/Less: Bank errors -
customer's Adjusted balance P 119,400
NSF check for
$2,400 that Balance per book, end. P
had been Add: Credit memo -
returned Less: Debit memo (2,400)
Add/Less: Bank errors -
Adjusted balance P 119,400
 Balance per book, end. P
Add: Credit memo -
Solve for the Less: Debit memo (2,400)
balance per Add/Less: Bank errors -
book, end Adjusted balance P 119,400
amount

P 119, 400 - ( - 2,400)

 Balance per book, end. P 121,
Add: Credit memo -
Solve for the Less: Debit memo (2,400)
balance per Add/Less: Bank errors -
book, end Adjusted balance P 119,400
amount

P 119, 400 - ( - 2,400)

Sandy, Inc. had the following bank reconciliation at March 31, 2004:

Balance per bank statement, 3/31/04 P37,200

Add: Deposit in transit 10,300

47,500
NUMBER 10
Less: Outstanding checks (12,600)

Balance per books, 3/31/04 P34,900

Data per bank for the month of April 2004 follow:

Deposits P42,700

Disbursements 49,700

All reconciling items at March 31, 2004 cleared the bank in April.
Outstanding checks at April 30, 2004 totaled P5,000. There were no
deposits in transit at April 30, 2004. What is the cash balance per books
at April 30, 2004?
 Cash receipts per books
in April 30, 2004

Deposits per bank – April P42,700

Less: DIT in March that cleared in April (10,300)

Add: DIT as of April 30 -
Cash receipts per books – April 32,400
 Cash disbursements
per books in April

Disbursements per bank – April P49,700

Less: OC in March that cleared in April (12,600)
Add: OC as of April 30 5,000
Disbursements per books – April P42,100
 Cash receipts per books
in April 30, 2004
CASH IN BANK
Deposits per bank – April P42,700

P 34,900
Less: DIT in March that cleared in April (10,300)
Add: DIT as of April 30 -
Cash receipts per books – April 32,400

beg. bal - March 31

Cash disbursements
per books in April
Disbursements per bank – April P49,700
Less: OC in March that cleared in April (12,600)
Add: OC as of April 30 5,000
Disbursements per books – April P42,100
 Cash receipts per books
in April 30, 2004
CASH IN BANK
Deposits per bank – April P42,700

P 34,900
Less: DIT in March that cleared in April (10,300)
Add: DIT as of April 30 - 32,400
Cash receipts per books – April 32,400

Cash disbursements
per books in April
Disbursements per bank – April P49,700
Less: OC in March that cleared in April (12,600)
Add: OC as of April 30 5,000
Disbursements per books – April P42,100
 Cash receipts per books
in April 30, 2004
CASH IN BANK
Deposits per bank – April P42,700

P 34,900 P 42,100
Less: DIT in March that cleared in April (10,300)
Add: DIT as of April 30 - 32,400
Cash receipts per books – April 32,400

Cash disbursements
per books in April
Disbursements per bank – April P49,700
Less: OC in March that cleared in April (12,600)
Add: OC as of April 30 5,000
Disbursements per books – April P42,100
 Cash receipts per books
in April 30, 2004
CASH IN BANK
Deposits per bank – April P42,700

P 34,900 P 42,100
Less: DIT in March that cleared in April (10,300)
Add: DIT as of April 30 - 32,400
Cash receipts per books – April 32,400
67, 300 42,100

Cash disbursements
per books in April
Disbursements per bank – April P49,700
Less: OC in March that cleared in April (12,600)
Add: OC as of April 30 5,000
Disbursements per books – April P42,100
 Cash receipts per books
in April 30, 2004
CASH IN BANK
Deposits per bank – April P42,700

P 34,900 P 42,100
Less: DIT in March that cleared in April (10,300)
Add: DIT as of April 30 - 32,400
Cash receipts per books – April 32,400
67, 300 42,100
P25, 200

Cash disbursements
per books in April
Disbursements per bank – April P49,700
Less: OC in March that cleared in April (12,600)
Add: OC as of April 30 5,000
Disbursements per books – April P42,100