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Bank reconciliation

Louis Nicosia operates four 7-11 stores. He has just received the monthly bank statement at October 31 from City National Bank, and the statement shows an ending balance of $3,840. Listed on the statement are an EFT rent collection of $400, a service charge of $12, two NSF checks totaling $74, and a $9 charge for printed checks. In reviewing his cash records, Nicosia identifies outstanding checks totaling $467 and an October 31 deposit in transit of $1,788. During October, he recorded a $290 check for the salary of a part-time employee by debiting Salary Expense and crediting Cash for $29. Nicosia's Cash account shows an October 31 cash balance of $5,117. Prepare the bank reconciliation at October 31.

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In bank reconciliation we adjust the bank and book balances so that they become equal. Deposits in transit and outstanding checks are already recorded in the books and so affect the bank balance. Deposits increase and checks reduce the ...

Solution Summary

The solution explains how to prepare a bank reconciliation for Louis Nicosia