Question

The following information pertains to the bank transactions of Crawford Company:

A.	Cash on the books as of September 30 was $1,299. Cash as shown on the bank statement for the same date was $1,330.
B	Bank service charges for September amounted to $9.
C.	A deposit of $160, representing cash receipts of September 30, did not appear on the bank statement.
D	An NSF check for $80 from a customer, Jack Betz, was returned with the statement.
E.	Outstanding checks totaled $240.
F.	Interest earned on the account of $40 was reported on the bank statement.

Prepare the book side of the bank reconciliation in good form (label all numbers) for Crawford Company as of September 30.

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Answer 1

1) The balance as per the books of the company = $ 1,299 (given) (recon from company side)

Less - NSF amount = 80 (NSF decreases the bank balance so decrease here as well)

Less - Service charges by bank 9 (service charges decreases the bank balance so decrease here as well)

Add - interest earned 40 (Interest amount increases the bank balance so increase here as well)

2) Adjusted cash balance in the books = 1299-80-9+40 = $ 1,250

3) The balance as per books of bank = 1,330 (given) (recon from bank side)

Add - Deposits not reflected (in transit) = 160 (deposits not reflected here so add)

Less - Outstanding checks = 240 (outstanding checks reduce the book balance so reduce here as well)

4) Adjusted cash balance as per bank books = 1330+160-240 = $1,250

Ultimately the adjusted balances as per company books and bank books shall tie. So in the above recon step 2) and ste 4) are matching with each other(1,250).

Hence recon is complete.