Davidson, Inc.'s bank statement for January 31st showed a balance of $4,917.18. To reconcile this with the company's cash balance, outstanding deposits of $1,230.50 were added, while outstanding checks of $1,145.68 were subtracted, resulting in a correct cash balance of $5,002. Comparing this to the cash book balance of $5,085.92, adjustments were made by subtracting bank charges of $80 and a wrongly recorded check of $8.08, as well as adding interest earned of $4.16 to match the correct cash balance.
1. The following information relates to Davidson, Inc. for January.
A. The balance on the bank statement for January 31 is $4,917.18.
B. The cash balance recorded in Davidson
Solution
Bank reconciliation Statement:
Amount($) Amount($)
Balance as Per Bank Statement 4,917.18
Add: Deposite In Transit 1,230.50
Less: Outstanding Checks 1,145.68
Correct Cash Balance 5,002
Balance As Per Cash Book 5,085.92
Less: Bank Charges 80
Add: Interest Earned 4.16
Less: Check wrong recorded 8.08
Correct Cash Balance 5,002
