Question

Don Wyatt is unable to reconcile the bank balance at January 31. Don?s reconciliation is as follows.
Cash balance per bank $3,800.20
Add: NSF check 570.00
Less: Bank service charge 35.00
Adjusted balance per bank $4,335.20
Cash balance per books $4,115.20
Less: Deposits in transit 650.00
Add: Outstanding checks 940.00
Adjusted balance per books $4,405.20
Prepare a correct bank reconciliation.

Answer 1

Answer and Explanation:

The preparation of the correct bank reconciliation is presented below:

                                             Don Wyatt

                         Bank reconciliation statement  

                                           January 31

Particulars                       Amount           Particulars                    Amount  

Bank cash balance        $3,800.20         Company cash balance $4,115.20

Deposits in transit           $650                Less: NSF check            -$570

Less: Outstanding                                    Less: service fee            -$35

Check                              -$940

Bank balance                                              Company balance

After reconciliation         $3,510.20           After reconciliation $3,510.20

We adjust the transactions according to the bank balance and book balance so that the both balance could be matched accordingly