Question

Some banks offer free online banking and bill payment; others charge a flat fee-say-$6

to pay 20 bills. (You still pay regular account fees.) Wally Wirth uses his home computer
for banking and is charged $6. His bank statement also showed $3.00 for check printing,
$2.80 for processing 28 checks at $.10 each, and $480.00 for collecting a note. Wally
had the following outstanding checks: No.480, $212.80; No. 483, $416.12; No. 484,
$131.08. Wally's bank statement shows a balance of $1,072.00; his checkbook shows a
balance of $43.80. A $200 deposit does not appear on the bank statement. Prepare Wally
Wirth's bank reconciliation.

Answer 1

To prepare Wally Wirth's bank reconciliation, we need to compare the balances shown in his bank statement and his checkbook. By following a series of steps, including adding outstanding checks, subtracting deposits missing from the bank statement, and accounting for bank fees, we can determine the adjusted balance that matches Wally's checkbook balance. The bank reconciliation should show a final adjusted balance that matches the balance in Wally's checkbook, which is $43.80.

Step-by-step explanation:

To prepare Wally Wirth's bank reconciliation, we need to compare the balances shown in his bank statement and his checkbook. Here are the steps:

1. Start with the bank statement balance of $1,072.00.
2. Add outstanding checks: ($212.80 + $416.12 + $131.08) = $760.00.
3. Subtract any deposits that do not appear on the bank statement. In this case, there is a $200 deposit missing, so subtract $200 from the previous total: $760.00 - $200 = $560.00.
4. Add any bank charges or fees: $6.00 (flat fee for bill payment).
5. Subtract any other charges or fees shown on the bank statement: $3.00 for check printing + $2.80 for processing checks = $5.80.
6. Finally, compare the adjusted total to the balance shown in Wally's checkbook, which is $43.80.

The bank reconciliation should show a final adjusted balance that matches the balance in Wally's checkbook, which is $43.80.