Bank Reconciliation Statements Bank reconciliation statements are statements prepared to reconcile the balances of bank balances as per the company’s records and as per the balances of the bank statements, as they may not always match owing to timing differences of financial transactions. For example, when a check is issued today by a company to a vendor for past purchases, it records a cash outflow in its statements today and lowers the balance of the bank in its books. However the actual balance of the bank account may not reduce till the check actually clears and hence there is a timing difference. These timing differences lead to difference between the balances of bank balances as per the company’s records and as per the balances of the bank statements and bank reconciliation statements help in reconciling these balances. To Prepare: Bank Reconciliation Statements

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Chapter 8, Problem 6QS

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Bank Reconciliation Statements

Bank reconciliation statements are statements prepared to reconcile the balances of bank balances as per the company’s records and as per the balances of the bank statements, as they may not always match owing to timing differences of financial transactions.

For example, when a check is issued today by a company to a vendor for past purchases, it records a cash outflow in its statements today and lowers the balance of the bank in its books. However the actual balance of the bank account may not reduce till the check actually clears and hence there is a timing difference.

These timing differences lead to difference between the balances of bank balances as per the company’s records and as per the balances of the bank statements and bank reconciliation statements help in reconciling these balances.

To Prepare:

Bank Reconciliation Statements

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Problem No. 2 The trial balance of Cleint Lumanao Nacho Supplies on February 10, 2025, before accepting Shila Tajonera as partner is shown as follows: Account Title Debit Credit Ato Cash reening smuo P 100,000 Accounts Receivable 250,000 Allowance for Uncollectible Accounts P 20,000 o Merchandise Inventory Equipment Accumulated Depreciation Accounts Payable Notes Payable 120,000 275,000 55,000 50,000 82,000 538,000 Lumanao, Capital Total P 745,000 P 745,000 Tajonera offered to invest cash to get a capital credit equal to one-half of Lumanao's capital after giving effect to the adjustments below. Lumanao accepted the offer. Valuation of some of the assets and liabilities of Lumanao, as agreed by the partners, are the following: • The merchandise is to be valued at P93,000. The accounts receivable is estimated to be 90% collectible. • The equipment is to be valued at P200,000. The partners also agreed that the name of the partnership will be Nacho Business. Required: 1. In the books of…

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