LAS in Acounting 2 Week 2

Republic of the Philippines
Department of Education
REGION IV-A CALABARZON
SCHOOLS DIVISION OFFICE OF BATANGAS PROVINCE
DR. JUAN A. PASTOR MEMORIAL NATIONAL HIGH SCHOOL
TALAIBON, IBAAN, BATANGAS
LEARNING ACTIVITY SHEET IN FUNDAMENTALS OF ACCOUNTANCY,

BUSINESS AND MANGEMENT 2
Quarter 2 Week 2: BANK RECONCILIATION STATEMENT
MELC: 1. Describe the nature of a bank reconciliation statement
2. Analyze the effects of the identified reconciling items
3. Prepare a bank reconciliation statement
Objective: After going through this module, you are expected to:
1. Describe the nature of a bank reconciliation statement;
2. Identify common reconciling items and describe each of them.
3. Analyze the effect of the identified reconciling items
4. Prepared a bank reconciliation statements
An accounting tool used by businesses and individuals to know the true balance of cash in a
bank account is the bank reconciliation statement. Under the adjusted balance method of bank
reconciliation, the balance per bank is reconciled with the balance per depositor’s books.
These three methods of preparing a bank reconciliation statement of business as follows:

a. The adjusted method is a method that adjusts both balances per bank and balances per book to
determine the correct cash balance separately.
b. Book to Bank Method is a method that adjusts the book balance to agree with the bank balance.
c. Bank to Book Method is a method that adjusts the bank balance to agree with the book balance.
Credit Memo- are additions made by the bank to the account of the depositor. Examples are
bank collections and interest income.
a. Bank Collections collection of receivables made by the bank on behalf of the depositor.
b. Interest Income appears as an addition to the depositors' account given by the bank as an interest
to the depositors' account balance.
Debit Memo - are deductions made by the bank to the account of the depositor. Examples are
bank charges for returned checks due to no sufficient fund (NSF Checks), automatic debits, or
payment of bills made by the bank on behalf of the depositor and bank service charge such as for
printing, checkbooks, and mailing the bank statement.
Bank service charges - are fees such as check printing and processing that the bank deducts
from the depositor.
NSF (no sufficient fund) check - is a check that was dishonored and returned by the bank to
the person or company writing the check because that account did not have enough funds. Book
Errors - are items erroneously recorded by the company. For example, the company deposit
P20,000 but recorded it P2,000.
Address: Talaibon, Ibaan, Batangas

Telephone No.: (043) 311-2651
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Deposit in Transit- amounts received and recorded by the company but not yet deposited or
the amount deposited after the bank's cut-off time.
Outstanding Checks - checks issued by the company to payees but not yet encashed with
the bank or cleared by the bank
Bank Errors - are items erroneously recorded by the bank. For example, a check deposit of
P10,000 was recorded P1,000.
Analysis of the Effects of the Identified Reconciling Items

TRANSACTION NAME OF THE BANK / ADD/ DEDUCT ADD/DEDUCT
BOOK RECONCILING ITEM TO BOOK TO BANK
1. A check of Ᵽ35, 000 issued to a Outstanding Check Deduct to bank
supplier, was not yet presented as
payment to the bank
2. Ᵽ1,500 cash received by the Deposit in Transit Add to bank
company, recorded on March 31,
however, the cash deposited at the
bank on the afternoon of April 1
3. The bank erroneously added Bank Error Deduct to bank
Ᵽ12,000 deposit of Rommel Note: The cash
Upholstery Co, to Rommel Repairs bank balance
account.
overstated, thus
the correction is a
deduction of P
Ᵽ12,000 to the
cash bank balance
4. The teller erroneously debited Bank Error Add to bank Note:
Ᵽ20,000 to Rommel Repairs The cash bank
account instead of Ᵽ2,000. balance was
understated; thus
the correction is an
addition of Ᵽ18,000
(20,000-2,000) to
the cash bank
balance
5. The customer deposited Ᵽ10,000 Collection of receivables Add to book
to the company’s bank account as directly received by the bank
payment of receivable but not (Credit Memo)
recorded in the company’s book.
6. Payment of electric bills Auto Debits (Debit Memo) Deduct to book
automatically deducted on the
company’s bank account
7. A collection of Ᵽ10,000 recorded Book Error Add to book Note:
in the company’s book as Ᵽ1,000. The cash book
The bank statement shows the balance was
correct amount of Ᵽ10,000 understated; thus

Telephone No.: (043) 311-2651
the correction is
an addition of
Ᵽ9,000 (10,000-
1,000) to the
cash book
balance
8. A collection of Ᵽ5,000 recorded Book Error Deduct to book
in the company’s book as Ᵽ50,000. Note: The cash
The bank statement shows the book balance
correct amount of Ᵽ5,000 overstated; thus
the correction is a
deduction of
Ᵽ45,000 (5,000-
50,000) to the
cash book
balance
9. Charge for printing company Bank Service Charge (Debit Deduct to book
checks and service fee Memo)
10.Interest credited to the bank Interest Income (Credit Memo) Add to book
accoun
11. The bank statement shows a NSF- No sufficient fund (Debit Deduct to book
return check of Ᵽ500 by the Memo)
customer.
ILLUSTRATION: TRANSACTION ANALYSIS

Kayanatin Repairs March 2020 bank statement shown Ᵽ510,000 balance. As of March 31, 2020,
accounting records had a cash balance of Ᵽ710,000. Determined the following information.
a. Kayanatin Repairs issued a check amounting Ᵽ55,000 to a supplier, which not yet
presented to the bank for payment.
b. A deposit slip no. 1234 was a check deposit amounting to Ᵽ305,000, which not yet added to
the company's account.
c. Collection of account receivable amounting to Ᵽ70,000 deposited by a customer directly to
the company's account, which not yet recorded to the company's record.
d. The bank directly takes out Ᵽ20,000 as payment to the company's monthly PLDT bill.
Requirement: Analyze the transactions and prepare the Bank Reconciliation
Solution:
a. The check of Ᵽ55,000 issued to the supplier but not yet encashed is an Outstanding check,
which deducted to the bank cash balance.
b. The check deposited of Ᵽ305,000 but not yet credited to the company's bank account is a
Deposit in Transit added to the bank cash balance.
c. The collection of Receivable amounted to Ᵽ70,000 is not yet recorded to the company's cash
balance. Therefore, it should be a Credit Memo added to the company's book balance.
d. Ᵽ20,000 payment or auto-debit should be deducted to the cash book balance as a Debit
Memo since the company's had no record of it yet.

Telephone No.: (043) 311-2651
WRITTEN TASK:
TASK 1.
Identify whether the following independent transaction is a book or a bank reconciling. In addition,
determine the amount of the error and state whether the amount will be added or deducted in the
preparation of the bank reconciliation(use adjusted method):
1. Eagle Repairs received P1,500 from Jane. The bookkeeper recorded the amount as P500.
2. Nation Bank collected from the customer of Eagle the sum of P5,000 representing payment of
the said customer to Eagle. No entry was made in the books of Eagle.
3. The bank teller deducted CK 123 for P3,500 from the account of Eagle. The said check was
issued by Egles Company a different depositor of the bank.
4. The bookkeeper of Eagle recorded Check No. 345 in the Cash Disbursement Journal as
P5,205. The correct amount of the check was P5,250
5. The deposits of Eagle earned interest of P100 for the month. Eagle does not have knowledge of
interest earned until it receives the bank statement
TASK 2.
1. The bank statement for August 2014 shows an ending balance of Php3,490.
2. On August 31 the bank statement shows charges of Php35 for the service charge for
maintaining the checking account.
3. On August 28 the bank statement shows a return item of Php100 plus a related bank fee of
Php10. The return item is a customer's check that was returned because of insufficient funds
4. The bank statement shows a charge of Php80 for check printing on August 20
5. The bank statement shows that Php8 was added to the checking account on August 31 for
interest earned by the company during the month of August.
6. The bank statement shows that a note receivable of Php1,000 was collected by the bank on
August 29 and was deposited into the company's account. On the same day, the bank
withdrew Php40 from the company's account as a fee for collecting the note receivable
7. The company's Cash account at the end of August shows a balance of Php967.
8. During the month of August the company wrote checks totaling more than Php50,000. As of
August 31 Php3,021 of the checks written in August had not yet cleared the bank and
Php200 of checks written in June had not yet cleared the bank.
9. The Php1,450 of cash received by the company on August 31 was recorded on the company's
books as of August 31. However, the Php1,450 of cash receipts was deposited at the bank on
the morning of September 1.
10. On August 29 the company's Cash account shows cash sales of Php145. The bank statement
shows the amount deposited was actually Php154. The company reviewed the transactions
and found that Php154 was the correct amount.
Requirements: Given the above information, discuss each item whether it is a book reconciling or a
bank reconciling item. After the discussion, prepare a bank reconciliation statement.
PERPORMANCE TASKS: Bank reconciliation problem:

The bank statement for Juan Company shows a balance per bank of P15,907.45 on April 30,2015.
On this date the balance of cash per books is P11,589.45.
Additional information are provided below:
Deposits in transit: April 30 deposit (received by the bank on May 1) P2,201.40
Outstanding checks: No. 453-P3,000.00
No. 457-P1,401.30
No. 460-P1,502.70
Errors: Juan wrote check no. 443 for P1,226.00 and the bank correctly paid that amount. However,
he recorded the check as P1,262.00.
Bank memoranda: Debit– NSF check from Pedro P425.60 .

Telephone No.: (043) 311-2651
Debit– Charge for printing company checks P30.00

Credit – Collection of note receivable for P1,000 plus interest earned of P50, less
bank collection fee of P15.00.
Required: Prepare a bank reconciliation statement using the adjusted method.
Hint: Bank Debit Memo are deductions made by the bank to the account of the depositor
Bank Credit Memo are additions made by the bank to the account of the depositor

Telephone No.: (043) 311-2651

Telephone No.: (043) 311-2651

LAS in Acounting 2 Week 2

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Republic of the Philippines

LEARNING ACTIVITY SHEET IN FUNDAMENTALS OF ACCOUNTANCY,

These three methods of preparing a bank reconciliation statement of business as follows:

Address: Talaibon, Ibaan, Batangas

Analysis of the Effects of the Identified Reconciling Items

Address: Talaibon, Ibaan, Batangas

ILLUSTRATION: TRANSACTION ANALYSIS

Address: Talaibon, Ibaan, Batangas

PERPORMANCE TASKS: Bank reconciliation problem:

Address: Talaibon, Ibaan, Batangas

Debit– Charge for printing company checks P30.00

Address: Talaibon, Ibaan, Batangas

Address: Talaibon, Ibaan, Batangas

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