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    Bank reconciliation

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    Leng Xiong is unable to reconcile the bank balance as of January 31, Leng's reconciliation is shown here:

    Cash Balance per bank = $3,660.20
    Add: NSF check = 370.00
    Less Bank Service Charge = 25.00
    Adjusted Bank Balance per bank = $4,005.20

    Cash Balance per books = $3,975.20
    Less: Deposits in transits = 590.00
    Add: Outstanding checks = 670.00
    Adjusted balance per books = $4,055.20

    a) What is the proper adjusted cash balance per bank?
    b) What is the proper adjusted cash balance per books?
    c) Prepare the adjusting journal entries necessary to determine the adjusted cash balance per books?

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    Solution Preview

    In making the adjusted balance we need to be careful in adding the subtracting the correct transactions in bank and book. We should use those transactions in book which are already recorded in bank and use those transactions in bank which are already recorded in books.

    From the transactions given here, NSF ...

    Solution Summary

    The solution explains how to prepare a bank reconciliation and the related journal entries