Question

Prepare a bank reconciliation for Oldroyd Company at January 31, 2003, using the information shown.

1. Cash per the accounting records at January 31 amounted to $\$72,802$; the bank statement on this same date showed a balance of $\$64,502$.

2. The canceled checks returned by the bank included a check written by the Oldham Company for $\$1,764$ that had been deducted from Oldroyd's account in error.

3. Deposits in transit as of January 31, 2003, amounted to $\$10,928$.

4. The following amounts were adjustments to Oldroyd Company's account on the bank statement:

a. Service charges of $\$26$.

b. An NSF check of $\$1,400$.

c. Interest earned on the account, $\$40$.

5. Checks written by Oldroyd Company that have not yet cleared the bank include four checks totaling $\$5,778$.

Answer 1

The bank reconciliation is prepared as follows:

Particulars	Amount$
Bank Statement Balance	64,502
Add : Deposists in transit	10,928
Add : Cancelled check returned	1,764
Less : Outstanding check returned	5,778
Adjusted Bank Balance	71,416

Particulars	Amount$
Book Balance	72,802
Add : Interest earned on account	40
Less : Service charges	26
Less : NSF Check	1,400
Adjusted Book Balance	71,416