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Problem B – The following transactions were recorded for Echo Company for the month of July 2020: 1. The account "Cash in Bank" showed a balance of P261,320 as of July 31, 2020. 2. Bank statement ending balance for the same month amounted to P253,320. 3. At the last day of July, the company received a P100,000 payment from a walk-in customer. Due to a delay in the delivery to the bank, the amount was only credited by the bank on August 2, 2020. 4. The company issued a check worth P92,000 to a creditor. It was only encashed by the creditor on August 13, 2020. 5. The bank credited P400 interest income to the account of Echo Company for the month of July 2020. The company only knew of this amount upon receipt of the July bank statement on August 1, 2020. 6. The bank deducted P80 from the account of Echo Company as a 20% withholding tax for the P400 interest income. The company also knew about this upon receipt of the bank statement on August 1, 2020.

Problem B – The following transactions were recorded for Echo Company for the month of July 2020: 1. The account "Cash in Bank" showed a balance of P261,320 as of July 31, 2020. 2. Bank statement ending balance for the same month amounted to P253,320. 3. At the last day of July, the company received a P100,000 payment from a walk-in customer. Due to a delay in the delivery to the bank, the amount was only credited by the bank on August 2, 2020. 4. The company issued a check worth P92,000 to a creditor. It was only encashed by the creditor on August 13, 2020. 5. The bank credited P400 interest income to the account of Echo Company for the month of July 2020. The company only knew of this amount upon receipt of the July bank statement on August 1, 2020. 6. The bank deducted P80 from the account of Echo Company as a 20% withholding tax for the P400 interest income. The company also knew about this upon receipt of the bank statement on August 1, 2020.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem Solving. 

Required: 
1. Prepare a properly classified bank reconciliation statement for each of the problems 
given below.
2. Prepare the necessary adjusting journal entries on the company’s book for book 
reconciling items.

Problem B - The following transactions were recorded for Echo Company for the month of July 2020: 1. The account "Cash in Bank" showed a balance of P261,320 as of July 31, 2020. 2. Bank statement ending balance for the same month amounted to P253,320. 3. At the last day of July, the company received a P100,000 payment from a walk-in customer. Due to a delay in the delivery to the bank, the amount was only credited by the bank on August 2, 2020. 4. The company issued a check worth P92,000 to a creditor. It was only encashed by the creditor on August 13, 2020. 5. The bank credited P400 interest income to the account of Echo Company for the month of July 2020. The company only knew of this amount upon receipt of the July bank statement on August 1, 2020. 6. The bank deducted P80 from the account of Echo Company as a 20% withholding tax for the P400 interest income. The company also knew about this upon receipt of the bank statement on August 1, 2020.
Transcribed Image Text:Problem B - The following transactions were recorded for Echo Company for the month of July 2020: 1. The account "Cash in Bank" showed a balance of P261,320 as of July 31, 2020. 2. Bank statement ending balance for the same month amounted to P253,320. 3. At the last day of July, the company received a P100,000 payment from a walk-in customer. Due to a delay in the delivery to the bank, the amount was only credited by the bank on August 2, 2020. 4. The company issued a check worth P92,000 to a creditor. It was only encashed by the creditor on August 13, 2020. 5. The bank credited P400 interest income to the account of Echo Company for the month of July 2020. The company only knew of this amount upon receipt of the July bank statement on August 1, 2020. 6. The bank deducted P80 from the account of Echo Company as a 20% withholding tax for the P400 interest income. The company also knew about this upon receipt of the bank statement on August 1, 2020.
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