Bank Reconciliation Notes

Bank Reconciliation Preparation

Given Data

• Boxer & Crate Cash Balance: $7,500 on January 31
• January Cash Receipts: $1,260 (included in the book balance)
• Deposited in Night Depository: January 31, processed on February 1
• NSF Check: $140 (from the bank statement)
• Bank Service Fee: $70 (from the bank statement)
• Outstanding Check: $1,810 (not processed by the bank by January 31)
• Bank Statement Cash Balance: $7,840 on January 31

Bank Reconciliation Process

1. Calculate the Cash balance from Bank Statement before reconciliation

• Starting Balance: $7,840
• Adjustments to Bank balance:
  • Subtract Outstanding Check: $1,810
  • Adjusted Bank Balance = $7,840 - $1,810
  • Adjusted Bank Balance: $6,030

2. Calculate Company's Cash Balance before reconciliation

• Cash Balance from Books: $7,500
• Adjustments to Company balance:
  • Subtract NSF Check: $140
  • Subtract Bank Service Fee: $70
  • Total Subtractions = $140 + $70 = $210
  • Adjusted Company Balance = $7,500 - $210 = $7,290

3. Final Adjusted Balances

Bank's Cash Balance:

• Before Reconciliation: $7,840
• After Reconciliation: $6,030

Company's Cash Balance:

• Before Reconciliation: $7,500
• After Reconciliation: $7,290

Summary

• Adjusted Bank Balance: $6,030
• Adjusted Company Balance: $7,290