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