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Unit 2 Illustration Problem

The document provides bank statements for Apathy Company and First Bank for the month of December, showing deposits, withdrawals, checks, and balances. It also notes that a $30,000 credit on December 29 for Apathy Company represents proceeds from a note collected by the bank. The required tasks are to prepare a bank reconciliation statement as of December 31 using the adjusted balance method and to prepare any necessary adjusting entries.

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Charlene Rodrigo
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2K views1 page

Unit 2 Illustration Problem

The document provides bank statements for Apathy Company and First Bank for the month of December, showing deposits, withdrawals, checks, and balances. It also notes that a $30,000 credit on December 29 for Apathy Company represents proceeds from a note collected by the bank. The required tasks are to prepare a bank reconciliation statement as of December 31 using the adjusted balance method and to prepare any necessary adjusting entries.

Uploaded by

Charlene Rodrigo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Camalaniugan Company provided the following information:

Apathy Company
Date Check No. Withdrawal Deposits Balance
Dec. 2 100,000 100,000
18 104 10,000 90,000
20 101 5,000 85,000
22 106 25,000 60,000
27 50,000 110,000
29 10,000 120,000
29 103 40,000 80,000
29 CM 30,000 110,000
31 Service charge – DM 2,000 108,000

FIRST BANK
Dec 1 Deposit 100,000 Dec 4 Check No. 101 5,000
21 Deposit 50,000 6 Check No. 102 15,000
27 Deposit 10,000 8 Check No. 103 40,000
31 Deposit 80,000 8 Check No. 104 10,000
10 Check No. 105 30,000
14 Check No. 106 25,000
28 Check No. 107 50,000

The credit made by the bank on December 29 represents the proceeds of a note
received from a customer which was given to the bank for collection by the entity on
December 26.

Required:

a. Prepare a bank reconciliation statement on December 31 using the adjusted


balance method.

b. Prepare adjusting entries.

Solution:

Requirement a:

Balance per book 65,000


Add: CM for note collected 30,000
Total 95,000
Less: DM for service charge 2,000
Adjusted book balance 93,000

Balance per bank 108,000


Add: Deposit in transit 80,000
Total 188,000
Less: Outstanding checks
No. 102 15,000
105 30,000
107 50,000 95,000
Adjusted bank balance 93,000

Requirement b:

a. Cash in bank 30,000


Notes receivable 30,000

b. Bank service charge 2,000


Cash in bank 2,000

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