Question

4-10. Carol Stokke receives her April 6 bank statement showing a balance of $859.75; her checkbook balance is
$954.25. The bank statement shows an ATM charge of $25.00, NSF fee of $27.00, earned interest of $2.75,
and Carol's $630.15 refund check, which was processed by the IRS and deposited to her account. Carol has
two checks that have not cleared-No. 115 for $521.15 and No. 116 for $205.50. There is also a deposit in
transit for $1,402.05. Prepare Carol's bank reconciliation. LU 4-2(3)

Answer 1

Carol's bank reconciliation has cash balance of  $1,535.15 and bank balance of  $1,535.15.

Bank reconciliation

Checkbook balance $ 954.25

Add  Interest $2.75

Add IRS refund $630.15

[$ 954.25 + ($ 2.75 + $630.15 ) = $1,587.15]

Less  ATM card fee $ 25.00

Less NSF fee $27.00

Book balance $1,535.15

[$1,587.15 - ($25.00 + $27.00)]

Bank balance: $ 859.75

Add Deposit in transit $1,402.05

[$ 859.75 + $1,402.05 = $2,261.80]

Less Outstanding checks:

No. 115: $521.15

No. 116: $205.50

Bank balance: $1,535.15

[$2,261.80 - ($521.15 + $205.50)]

Therefore  Carol's bank reconciliation has cash balance of  $1,535.15 and bank balance of  $1,535.15.

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