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Sensible Company maintained a cash account with Second Bank. The bank statement showed a balance of $45,000 on December 31. Sensible Company's records showed a higher balance of $50,000 due to several reconciling items. These included a $5,000 deposit in transit, $10,000 for an outstanding check, and a $5,000 debit memo charged in error to their account. After preparing a bank reconciliation statement and adjusting entries, the books were in agreement with the ending bank balance.

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204 views1 page

Activity

Sensible Company maintained a cash account with Second Bank. The bank statement showed a balance of $45,000 on December 31. Sensible Company's records showed a higher balance of $50,000 due to several reconciling items. These included a $5,000 deposit in transit, $10,000 for an outstanding check, and a $5,000 debit memo charged in error to their account. After preparing a bank reconciliation statement and adjusting entries, the books were in agreement with the ending bank balance.

Uploaded by

UwuuU
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Sensible Company provided the following ledger account of the cash in bank

maintained with Second Bank.


SECOND BANK
Date Date Check No.
Dec 1 Balance 100,000 Dec 1 771 20,000
6 Deposit 50,000 4 772 5,000
12 Deposit 10,000 6 773 35,000
23 Deposit 80,000 10 774 15,000
27 Deposit 14 775 30,000
18 776 25,000
23 777 40,000

The following bank statement was received from the Second Bank by Sensible
Company.
Date Check Deposit Balance
Dec 1 Balance 130,000
Check No. 768 10,000
771 20,000
4 772 5,000
6 773 35,000 30,000
12 774 15,000 40,000
18 776 52,000
23 1042 8,000 50,000
23 NSF check 10,000 45,000 CM
31 Service charge 5,000

Other information:
a. Sensible Company reconciled its bank balance on November 30 with two checks
N0. 768 for P10,000 and No. 770 for P20,000 outstanding.
b. Check No. 1042 was drawn by Sensitive Company. The bank charged it in error
to the account of Sensible Company.
c. Check No. 776 was correctly drawn for P52,000 in payment of account. The
amount P25,000 was entered in the books of original entry.
d. The bank credit on December 23 represents the proceeds of a P50,000 note less
a collection fee of P5,000 collected by the bank and credited to the account.
e. The NSF check was received from a customer in payment of account.

Compute for the book balance, bank balance, deposit in transit, outstanding check,
debit memo and credit memo.

Using the data above, prepare a bank reconciliation statement on December 31 using
any format. Prepare necessary adjusting entries as well. Use separate sheets for your
answer and solutions.

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