PROBLEM 6: FOR CLASSROOM DISCUSSION Bank reconciliation - Depositor vs. Bank Journal entries 1. The cash balance per books on June 30, 20x1 is P100,000, equal to the cash balance per bank statement on the same date. The transactions in July 20x1 are summarized below: a. Collections from customers totaled P500,000. All the collections were deposited; however, only P480,000 were credited by the bank to the entity's account as of July 31, 20x1. The difference was due to bank cut-off. b. Checks drawn totaled P200,000, of which P140,000 were encashed during the period. C. Customers deposited a total of P360,000 to the entity's bank account as payment of accounts receivable. The entity was not yet notified of the collections. Bank Reconciliation 147 d. The bank debited the entity's account for P40,000 representing payment for mobile phone charges. The entity was not yet notified of the payment. Requirements: a. Prepare the journal entries in the books of (1) the entity and (2) the bank, respectively. b. Compute for the following: (1) deposits in transit, (2) outstanding checks, (3) credit memo; and (4) debit memo. C. Prepare the July 31, 20x1 bank reconciliation. d. Prepare the reconciling entries in the entity's books