What is the unadjusted bank balance on December 31, 2020? ( How much is the total cash receipts per book in December? Show computation. I How much is the total cash disbursements per book in December? Show computation. (
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
![BSA Company prepared the November 30, 2020 bank reconciliation as follows:
Balance per bank statement
P1,500,000
200.000
P1,700,000
450,000
P1,250.000
Add: Deposit in transit
Total
Less: Outstanding checks
Balance per book, November 30
The bank statement for December 2020 showed the following:
a. Deposits totaled P4,500,000, including P100,000 note collected for BSA
Company.
b. Disbursements totaled P3,500,000, including P70,000 NSF check and P5,000
service charge.
c. The outstanding checks totaled P300,000 and the deposit in transit amounted to
P500,000 on December 31.
d. All reconciling items on November 30 cleared through the bank in December.
Complete the bank reconciliation:
Balance per bank statement, Dec. 31
Add:
Deposit in transit
Total
P
Less:
Adjusted bank balance, Dec. 31
Balance per book, Dec. 31
Note collected by bank
P
Add:
Total
Less: NSF check
Bank service charge
Adjusted book balance, Dec. 31
What is the unadjusted bank balance on December 31, 2020?
How much is the total cash receipts per book in December? Show computation. I
How much is the total cash disbursements per book in December? Show computation. (](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffa7470e4-cc19-4489-b59c-ff6c90a2c044%2Fc33a8117-f1d8-4302-a4ed-9c40d197a8d0%2Frdwhuzd_processed.jpeg&w=3840&q=75)
![BAM Company prepared the following bank reconciliation on December 31, 2020:
Book Balance
P 2,810,000
Add:
December 31 deposit in transit
P1,500,000
Collection of notes receivable
5,000,000
Interest on note receivable
300,000
6,800,000
P 9,610,000
Total
Less: BUM Company's deposit to our account
Bank service charge
Adjusted book balance
P2,200,000
10.000
2.210.000
P 7.400,000
Bank Balance
P11,260,000
Add:
Error on check no. 915
90.000
P11,350,000
Total
Less: Preauthorized payment for light and water
P 490,000
440,000
3,300,000
NSF check
Outstanding checks
Adjusted bank balance
4,230,000
P 7,120.000
Other information:
Check No. 915 was made for the proper amount of P450,000 in payment of account. However,
the check was entered in the cash disbursement journal as P540,000.
BAM Company authorized the bank to automatically pay its light and water bills as submitted
directly to the bank.
Required:
a. Prepare a corrected bank reconciliation (adjusted balances).
b. Prepare the adjusting entries on December 31.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ffa7470e4-cc19-4489-b59c-ff6c90a2c044%2Fc33a8117-f1d8-4302-a4ed-9c40d197a8d0%2Fsj7hoeq_processed.jpeg&w=3840&q=75)
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