QS 8-8 Bank reconciliation LO P3 Nolan Company's cash account shows a $21,268 debit balance and its bank statement shows $19,711 on deposit at the close of business on June 30. Outstanding checks as of June 30 total $2,231. The June 30 bank statement lists $27 in bank service charges; the company has not yet recorded the cost of these services. In reviewing the bank statement, a $50 check written by the company was mistakenly recorded in the company’s books as $59. June 30 cash receipts of $3,801 were placed in the bank’s night depository after banking hours and were not recorded on the June 30 bank statement. The bank statement included a $31 credit for interest earned on the company’s cash in the bank. The company has not yet recorded interest earned. Prepare a bank reconciliation using the above information.

A bank reconciliation is a document that reconciles or tallies the cash balance on the company's books to the corresponding amount on its bank statement which helps a company or business check and monitor unauthorized cash transactions and rectify any inconsistency.

Bank Reconciliation for Nolan Company in June 30

Bank Statement Balance $19, 711

Add:

Deposit made $3, 801

$23,512

Deduct:

Outstanding checks - $2,231

Adjusted Bank Balance $21,281

Cash Balance per Company's Records $21,268

Add:

Interest earned $31

Error in recording check (59-50) $9

$21,304

Deduct:

Service charges -$27

Adjusted Bank Balance $21,281