Bank reconciliation is the process of systematically comparing the cash balance as reported by the bank with the cash balance on the company's books explaining any differences.
Balance per bank Balance per book
Adjusted bank balance Adjusted book balance
The following information is available for Binford Company:
1. The May 2009 Bank statement showed the following:
a. Balance, May 1 $21,000.00
b. Cancelled Checks $13,904.20
c. Deposits $16,471.65
d. Interest earned by Binford $ 28.75
e. Balance, May 31
2. Binford Company's cash accounts showed the following for May:
a. Balance, May 1 $20,971.25
b. Debits $22,700.40
c. Credits $22,886.34
d. Balance, May 31 $20,785.31
3. The bank service charge for May was $18.
4. Outstanding checks totaled $9,100.14.
5. Deposits in transit totaled $8,000.00
6. The bank statement reveals that Binford Company's account has been reduced by $100. The company had deposited a $100 check from one of its customers, which was subsequently returned to Binford's bank and marked NSF.
7. The bank collected an $1,800 note for Bindford Company. The company was not aware of the collection until receiving the bank statement.
Prepare a bank reconciliation for May 31, 2009.
The solution prepartes Binford Company's Bank Reconciliation.