Question

Damon Company receives its monthly bank statement, which reports a balance of $2,000. After comparing this to the company’s cash records, Damon’s accountants determine that deposits outstanding total $4,200 and checks outstanding total $4,450. Required: Calculate the reconciled bank balance for cash. (Amounts to be deducted should be indicated with a minus sign.)

Answer 1

The reconciled bank balance for cash is $1,750.

Step-by-step explanation:

Bank reconciliation statement is prepared to reconcile the bank statement of a company to the balance per cash book (general ledger). The discrepancies between the two books are as a resulting of timing of transactions, outstanding checks, direct credit transfers to bank, among others.

The following is a way of reconciling the balance per bank statement to the cash book:

Damon Company

Bank reconciliation statement

Balance per bank statement $2,000

Add: Outstanding deposit $4,200

Less: Outstanding checks ($4,450)

Balance per cash book $1,750

Therefore, the reconciled bank balance for cash is $1,750.