Certainly! Let's go through the bank reconciliation process step-by-step to reconcile the book balance in the checking account with the bank statement's ending balance:
### Johnson Enterprises
#### Bank Reconciliation as of October 31
1. Bank Statement Balance:
Bank Statement Ending Balance: [tex]\( \$ 5,217.00 \)[/tex]
- Add: Deposits in Transit:
- October 29: [tex]\( \$ 210.00 \)[/tex]
- Less: Outstanding Checks:
- October 30: [tex]\( \$ 406.00 \)[/tex]
- Check No. 1635: [tex]\( \$ 56.40 \)[/tex]
Adjusted Bank Statement Balance:
[tex]\[
5,217.00 + 210.00 - 406.00 - 56.40 = \$ 4,964.60
\][/tex]
2. Book Balance:
Book Balance (per Checkbook): [tex]\( \$ 5,718.00 \)[/tex]
- Less: Unrecorded ATM Withdrawal:
- Check No. 1639: [tex]\( \$ 175.00 \)[/tex]
- Less: Bank Service Charge:
- Check No. 1641: [tex]\( \$ 135.50 \)[/tex]
- Less: NSF Checks:
- Check No. 1653: [tex]\( \$ 443.10 \)[/tex]
- Check No. 1653: [tex]\( \$ 200.00 \)[/tex]
- Check No. 1653: [tex]\( \$ 37.00 \)[/tex]
- Check No. 1653: [tex]\( \$ 476.00 \)[/tex]
- Add: Error on Check No. 1624:
- (Check was written for [tex]\( \$ 57.00 \)[/tex], but book shows [tex]\( \$ 75.00 \)[/tex])
- [tex]\[ Correction: \( 75.00 - 57.00 = \$ 18.00 \) \][/tex]
Adjusted Book Balance:
[tex]\[
5,718.00 - 175.00 - 135.50 - (443.10 + 200.00 + 37.00 + 476.00) + 18.00 = \$ 4,269.40
\][/tex]
### Summary of Reconciliation:
- Adjusted Bank Statement Balance: [tex]\( \$ 4,964.60 \)[/tex]
- Adjusted Book Balance: [tex]\( \$ 4,269.40 \)[/tex]
The differences can be due to timing issues and unrecorded transactions. The bank reconciliation helps to identify and adjust these discrepancies, ensuring that the book balance matches the bank statement balance after adjustments are made.
Note: The reconciliation identifies that after all adjustments, there is still a need to reconcile any discrepancies. Johnson Enterprises should investigate any remaining difference further until the books are fully reconciled with the bank statement.
