CHAPTER 13 1. What is the adjusted cash in bank?

Chapter 15 a. 1,575,000 c. 1,075,000

Bank Reconciliation b. 1,065,000 d. 1,325,000
Basic Problems
2. What is the unadjusted cash in bank per bank statement?
Problem 15-1 a. 1,310,000 c. 775,000
In preparing the bank reconciliation for the month of August, Apex Company b. 1,010,000 d. 945,000
provided the following information:
Balance per bank 1,805,000 Solution 15-3
Deposit in transit 325,000 Question 1 Answer c
Return of customer’s check for insufficient fund 60,000 Question 2 Answer b
Outstanding checks 275,000
Bank service charge for August 10,000 Per book 1,000,000
What is the adjusted cash in bank? Bank service charges (3,000)
a. 1,855,000 c. 1,785,000 Note collected by bank 375,000
b. 1,795,000 d. 1,755,000 Interest on note 15,000
NSF (62,000)
Answer: A Note charged to account (250,000)
Balance per bank 1,805,000 Adjusted book balance 1,075,000
Deposit in transit 325,000 Unadjusted balance per bank (SQUEEZE) 1,010,000
Total 2,130,000 Deposit in transit 300,000
Outstanding checks (275,000) Outstanding checks (235,000)
Adjusted bank balance 1,855,000 Adjusted cash in bank 1,075,000

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Problem 15-2 Problem 15-4 (IAA)

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In preparing the bank reconciliation for the month of December, Case Core Company provided the following data for the purpose of reconciling the

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Company provided the following data: cash balance per book with the balance per bank statement on December31,

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Balance per bank statement 3,800,000 2016:
Deposit in transit 520,000 Balance per book 850,000

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Amount erroneously credited by bank to Case’s account 40,000 Balance Per bank Statement 2,000,000
Bank service charge for December
NSF Check
rs e 5,000
50,000
Outstanding cheeks, Including certified check ofP100,000
Deposit in transit
500,000
200,000
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Outstanding checks 675,000 December NSF cheecks (of which P50,000 had
been redeposited and cleared on December 27) 150,000
1. What is the adjusted cash in bank? Erroneous credit to Core’s account, representing
a. 3,685,000 c. 3,600,000 proceeds of loan granted to another company 300,000
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b. 3,645,00 d. 3,605,000 Proceeds of note collected by bank for Core,

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net of service charge of P20,000 750,000

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2. What is the unadjusted cash in bank balance per book?

a. 3,550,000 c. 3,610,000 What amount should be reported as cash in bank on December 31, 2016?
b. 3,660,000 d. 3,655,000 a. 1,500,000 c. 1,800,000
b. 1,400,000 d. 1,450,000
Answer 1: D
ed d

Balance per bank statement 3,800,000 Solution 15-4 Answer a

Deposit in transit 520,000 Balance per bank 2,000,000
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Bank error- erroneous bank credit (40,000) Deposit in transit 200,000

Outstanding checks (675,000) Outstanding checks (500,000-100,000) (400,000)
Adjusted bank balance 3, 605,000 Erroneous bank credit 300,000
Adjusted bank balance 1,500,000
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Answer 2: B
Unadjusted book balance (squeeze) 3,660,000
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Bank service charge (5,000,000) Problem 15-5 (IAA)

NSF check (50,000) Aries Company kept all cash in a checking account. An examination of the
Adjusted cash in bank balance 3,605,000 accounting records and bank statement for the month of June revealed the
following information:
Problem 15-3
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Mindanao Company provided the following data for the month of December: *The cash balance per book on June 30 is P8,500,000. A deposit of
Balance per book P1,000,000 that was placed in the bank’s night depository on June 30 does
not appear on the bank statement.
Balance per book 1,000,000
Bank service charges 3,000 *The bank statement shows on June 30, the bank collected note for Aries
Outstanding checks 235,000 and credited the proceeds of P950,000 to the entity’s account. Checks
Deposit in transit 300,000 outstanding on June 30 amount to P3 00,000.
Customer note collected by bank 375,000
Interest on customer note 15,000 *Aries discovered that a check written in June for P200, 000 in payment of an
Customer check returned NSF 62,000 account payable, had been recorded 1n the entity’ s records as P20, 000.
Depositor’s payment of note payable charged to account 250,000 Included with the June bank statement was NSF check for P250,000 that

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 Aries had received from a customer on June 26. The bank statement shows a
P20,000 service charge for June. Solution 15-7 Answer b
Balance per bank 2,800,000
What amount should be reported as cash in bank on June 30? Deposits in transit 350,000
a. 9,000,000 c. 9,360,000 Outstanding checks (650,000)
b. 8,300,000 d. 9,180,000 Adjusted bank balance 2,500,000
Balance per ledger (SQUEEZE) 2,520,000
Solution 15-5 Answer a Interest income 10,000
Balance per book 8,500,000 Service charge (12,000)
Note collected by bank 950,000 Book error (64,000-46,000) (18,000)
Total 9,450,000 Adjusted book balance 2,500,000
Bank error (200,000-20,000) (180,000)
NSF check (250,000) Problem 15-8 (IAA)
Service charge (20,000) Letty Company provided the bank for the month of April which included the
Adjusted book balance 9,000,000 following information:
Bank service charge for April 15,000
Problem 15-6 (AICPA Adapted) Check deposited by Letty during April was not collectible,
Able Company received the bank statement for the month of March. and has been marked “NSF” by the bank and returned 40,000
However, the closing balance of the account was unreadable.
Attempts to contact the bank after hours did not secure the desired In comparing the bank statement to its own records, the entity found the
information. following:
February 28 book balance 1,460,000 Deposits made but not yet recorded by bank 130,000
Note collected by bank 100,000 Checks written and mailed but not yet recorded by bank 100,000
Interest earned on note 10,000

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NSF check of customer 130,000 A deposit in transit end outstanding checks have been properly recorded in

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Bank service charge on NSF check 2,000 the entity’s books.

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Other bank service charges 3,000 A customer check for P35,000 payable to Letty Company had not yet been

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Outstanding checks 202,000 deposited and had not been recorded by the entity.
Deposit of February 28 placed in night depository 85,000

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Check issued by Axle Company charged to Able’s account 20,000 The cash in bank account balance per ledger is P920,000.

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What is the cash balance per bank statement? What is the adjusted cash in bank on April 30?
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a. 1,435,000 c. 1,338,000 a. 900,000
b. 1,532,000 d. 1,557,000 b. 86,000
c. 930,000
Solution 15-6 Answer b d. 965,000
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February 28 book balance 1,460,000

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Note collected by bank 100,000 Solution 15-8 Answer a

Interest earned on note 10,000 Balance per ledger 920,000
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NSF check (130,000) Unrecorded customer check 35,000

Bank service charges (2,000 + 3,000) (5,000) Bank service charge (15,000)
Adjusted book balance 1,435,000 NSF check (40,000)
Balance per bank statement (SQUEEZE) 1,532,000 Adjusted book balance 900,000
ed d

Deposit in transit 85,000

Bank error erroneous charge 20,000 Problem 15-9 (IAA)
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Outstanding checks (202,000) Gallant Company showed a cash account balance of P4,500,000 at the
Adjusted bank balance 1,435,000 month-end.

Problem 15-7 (1AA) The bank statement did not include a deposit of P230 000 made on the last
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Stellar Company provided the bank statement for the month of December day of the month.
which included the following information:
The bank statement showed a collection by the bank of P94,000 for the
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Ending balance, December 31 2,800,000 depositor and a customer check for P32,000 returned because it was NSF.
Bank service charge for December 12,000
Interest paid by bank to Stellar Company for December 10,000 A customer check for P45,000 was recorded by the depositor as P54,000, and
a check written for P79,000 was recorded as P97,000.
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In comparing the bank statement to its own cash records, the entity found
the following: What amount should be reported as cash in hank?
a. 4,765,000 c. 4,819,000
Deposits made but not yet recorded by the bank 350,000 b. 4,571,000 d. 4,801,000
Checks written and mailed but not yet recorded by the bank 650,000
Solution 15-9 Answer b
In addition, the entity discovered that it had drawn and erroneously recorded Balance per book 4,500,000
a check for P46,000 that should have been recorded for P64,000. Collection by bank 94,000
NSF customer check (32,000)
What is the cash balance per ledger on December 31? Book error -customer check (54,000-45,000) (9,000)
a. 2,500,000 c. 2,540,000 Book error check written (97,000 -79,000) 18,000
b. 2,520,000 d. 2,800,000 Adjusted book balance 4,571,000
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 CHAPTER 16 Margar Company discovered that a check written in December for P183,000
in payment of an account had been recorded as P138,000.
BANK RECONCILIATION
Comprehensive problems Included with the December 3 1 bank statement was an NSF check for
P250,000 that Margar Company had received from a customer on December
Problem 16-1 (PHILCPA Adapted) 20. The bank statement showed a P15,000 service charge for December.
Divine Company prepared the following bank reconciliation on December 3
1, 2016: What is the adjusted cash in bank on December?
Balance per bank statement 2,800,000 a. 9,150,000 c. 9,195,000
Add: Deposit in transit 195,000 b. 9,240,000 d. 9,215,000
Checkbook printing charge 5,000
Error made by Divine in recording Solution 16-2 Answer a
check issued in December 35,000 Book balance 8,525,000
NSF check 110,000 345,000 Note collected by bank for the depositor 935,000
Total 3,145,000 Book error in recording check (183,000-138,000) (45,000)
Less: Outstanding check 100,000 NSF check (250,000)
Note collected by bank including Service charge (15,000)
P15,000 interest 215,000 315,000 Adjusted book balance 9,150,000
Balance per book 2,830,000
Balance per bank 8,470,000
The entity had cash on hand P500,000 and petty cash fund P50,000 on Deposit in transit 950,000
December 31, 201 6. Checks outstanding (270,000)
Adjusted bank balance 9,150,000
1. What amount should be reported as cash in bank on December 31, 2016?

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a. 2,930,000 c. 2,895,000 Problem 16-3 (IAA)

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b. 3,095,000 d. 3,130,000

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Ron Company provided the following data for the month of January:

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2. What total amount of cash should be reported on December 31, 2016?
a. 3,395,000 c. 3,445,000 Balance per book, January 31 3,130,000

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b. 3,350,000 d. 3,380,000 Balance per bank statement, January 31 3,500,000

Solution 16-1
rs e Collections on January 31 but undeposited
NSF check received from a customer returned by the
550,000
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Question 1 Answer c bank on February 5 with the January bank statement 50,000
Checks outstanding on January 31 650,000
Balance per bank 2,800,000 Bank debit memo for safety deposit box rental not
Deposit in transit 195,000 recorded by depositor 5,000
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Outstanding check (100,000) A creditor check for P30,000 was incorrectly

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Adjusted cash in bank 2,895,000 recorded in the depositor’s book as 300,000

A customer check for P200,000 was recorded
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Balance per book 2,830,000 by the depositor as 20,000

Note collected by bank 215,000 The depositor neglected to make an entry in its
NSF check (110,000) books for a check drawn in payment of an account payable 125,000
Book error (35,000)
ed d

Checkbook printing charge (5,000) What is the adjusted cash in bank on January 31?
Adjusted cash in bank 2,895,000 a. 3,130,000 c. 3,400,000
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b. 3,500,000 d. 2,950,000
Question 2 Answer C
Solution 16-3 Answer 6
Adjusted cash in bank 2,895,000 Balance per book 3,130,000
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Cash on hand 500,000 Overstatement of creditor check 270,000

Petty cash fund 50,000 Understatement of customer check 180,000
Total cash 3,445,000 NSF check (50,000)
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Bank debit memo for safety deposit box (5,000)

Problem 16-2 (PHILCPA Adapted) Unrecorded check (125,000)
Adjusted book balance 3,400,000
Margar Company kept all cash in a checking account. An examination of of
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the accounting records and bank statement for the month of December Balance per bank 3,500,000
revealed a bank statement balance of 8,740,000, and a book balance of Undeposited collections 550,000
8,525,000. Checks outstanding (650,000)
Adjusted Bank balance 3,400,000
A deposit of P950 000 placed in the bank ‘s night depository on December 29
does not appear on the bank statement. Problem 16-4 (IAA)
In reconciling the cash balance on December 31 with that shown in the bank
Checks outstanding on December 31 amount to P270,000. statement, Sam Company provided the following information:
Balance per bank statement 4,000,000
The bank statement showed that on December 25 the bank collected a note Balance per book 2,700,000
for Margar Company and credited the proceeds of P935,000 to the entity’s Outstanding checks 600,000
account which included P35,000 interest. Deposit in transit 475,000
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 Service charge 10,000 Payment has been stopped on check number 555 which was drawn in
Proceeds of bank loan, December 1, payment of an account payable. The payee cannot be located.
discounted for 6 months at 12%, not
recorded on Sam Company’s books 940,000 What is the adjusted cash in bank on August31?
Customer check charged back by bank a. 1,240,000 c. 1,210,000
for absence of counter signature 50,000 b. 1,230,000 d. 1,200,000
Deposit of P100,000 incorrectly recorded by bank as 10,000
Check of Sim Company charged by bank Solution 16-5 Answer a
against Sam account 150,000 Balance per book 130,000
Customer’s note collected by bank in favor of Company. Add: Overstatement of check number 765 20,000
Face 400,000 Check number 555 stopped for payment 10,000 30,000
Interest 40,000 Total 1,330,000
Total 440,000 Less: Service charge 5,500
Collection fee 5,000 435,000 NSF check 85,000 90,000
Erroneous debit memo of December 28, to charge Adjusted book balance 1,240,000
Sam account with settlement of bank loan 200,000
Deposit of Sim Company credited to Sam account 300,000 Balance per bank 1,200,000
Add: Undeposited collections 275,000
What is the adjusted cash in bank on December 31? Total 1,475,000
a. 4,315,000 c. 3,075,000 Less: Outstanding checks:
b. 3,925,000 d. 4,015,000 Number 761 55,000
762 40,000
Solution 16-4 Answer d 763 25,000
Balance per book 2,700,000 764 65,000

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Add: Proceeds of bank loan 940,000 765 50,000 235,000

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Customer note collected by bank 435,000 1,375,000 Adjusted bank balance 1,240,000

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Total 4,075,000

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Less: Service charge 10,000 Problem 16-6 (PHILCPA Adapted)
Customer check charged back 50,000 60,000

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Adjusted book balance 4,015,000 Mcbride Company provided the following data pertaining to the cash

rs e transactions and bank account for the month of May:

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Balance per bank 4,000,000 Cash balance per accounting record 1,719,000
Add: Deposit in transit 475,000 Cash balance per bank statement 3 195 000
Incorrect deposit 90,000 Bank service charge 10,000
Erroneous bank charge 150,000 Debit memo for the cost of printed checks delivered
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Erroneous debit memo 200,000 915,000 by the bank; the charge has not been recorded in
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Total 4,915,000 the accounting record 12,000

Less: Outstanding checks 600,000 Outstanding checks 685,000
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Erroneous bank credit 300,000 900,000 Deposit of May 30 not recorded by bank until June1 500,000
Adjusted bank balance 4,015,000 Proceeds of a bank loan on May 30, not recorded in
the accounting record, net of interest of P30,000 570,000
Proceeds from a customer promissory note, principal
ed d

Problem 16-5 (IAA) amount P800,000 collected by the bank not taken
Susan Company showed the following information on August 31: up in the accounting record with interest 810,000
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Balance of cash in bank account 1,300,000 Check No. 1086 issued to a supplier entered in the
Balance of bank statement 1,200,000 accounting record as P210,000 but deducted in the
Outstanding checks, August 31: bank statement at an erroneous amount of 120,000
Number 555 10,000 Stolen check lacking an authorized signature deducted
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761 55,000 from Mcbride’s account by the bank in error 80,000

762 40,000 Customer check returned by the bank marked NSF,
763 25,000 indicating that the customer balance was not adequate to
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764 65,000 cover the check; no entry has been made in the accounting
765 70,000 record to record the returned check 77,000

Receipts of August 31, deposited September 1,275,000 What is the adjusted cash in bank?
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Service charge for August 5,000 a. 3,000,000 c. 3,080,000

NSF check received from a customer 85,000 b. 2,910,000 d. 2,990,000

The cashier-bookkeeper had misappropriated P30,000 and an additional Solution 16-6 Answer a
P10,000 by charging sales discounts and crediting accounts receivable. Balance per book 1,719,000
Service charge (10,000)
The stub for check number 765 and the invoice relating thereto showed that Debit memo for printed checks (12,000)
it was for P50,000. It was recorded incorrectly in the cash disbursements Proceeds of bank loan 570,000
journal as P70,000. Proceeds of customer note 810,000
NSF customer check (77,000)
This check was drawn in payment of an account payable. Adjusted book balance 3,000,000

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 Balance per bank 3,195,000
Outstanding checks (685,000)
Deposit in transit 500,000
Bank error in recording check (90,000)
Stolen check deducted by bank in error 80,000
Adjusted bank balance 3,000,000

Problem 16-7 (IAA)

Grass Company provided the following information:
Balance per bank statement July 31 1,240,000
Balance per ledger, July 31 750,000
Deposit of July 30 not recorded by bank 280,000
Debit memo service charges 10,000
Credit memo collection of note by bank for Grass 300,000
Outstanding checks 550,000

An analysis of the canceled checks returned with the Bank statement

revealed the following:

*Check for purchase of supplies was drawn for P60,000 but was recorded as
P90,000.

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*The manager wrote a check for traveling expenses of P 1 00,000 while out

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of town. The check was not recorded.

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What amount of cash in bank should be reported on July 31?
a. 970,000 c. 550,000

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b. 270,000 d. 610,000

Solution 16-7 Answer a

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Balance per ledger 750,000
Service charges (10,000)
Collection of note 300,000
Book error in recording check (90,000-60,000) 30,000
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Unrecorded check for traveling expenses (100,000)

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Adjusted book balance 970,000

Balance per bank 1,240,000
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Deposit in transit 280,000

Outstanding checks (550,000)
Adjusted bank balance 970,000
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