4 QS 6-11 (Algo) Bank reconciliation LO P3Nolan Company's cash account shows a $26,426 debit balance and its bank statement shows $25,694 on deposit at the close ofbusiness on June 30.a. Outstanding checks as of June 30 total $2,907.b. The June 30 bank statement lists $32 in bank service charges; the company has not yet recorded the cost of these services.c. In reviewing the bank statement, a $80 check written by the company was mistakenly recorded in the company's books as $89.d. June 30 cash receipts of $3,656 were placed in the bank's night depository after banking hours and were not recorded on the June30 bank statement.e. The bank statement included a $40 credit for interest earned on the company's cash in the bank. The company has not yetrecorded interest earned.Prepare a bank reconciliation using the above information.Bank statement balanceAdd:Deduct:Adjusted bank balanceNOLAN COMPANYBank ReconciliationJune 30$00Book balanceAdd:Deduct:00 Adjusted book balance$0000

Bank Reconciliation is prepared to reconcile the balances of cash book with that of the bank statement .Thus it helps in locating the causes of the difference between the two . Nolan company Bank Reconciliation 30-Jun Bank Statement balance $ 25,694 Book Balance $ 26,426 Add: Add: Deposit in transit $ 3,656 Error in recording check $ 9 interest earned $ 40 $ 3,656 $ 49 $ 29,350 $ 26,475 Deduct: Deduct: Checks oustanding $ 2,907 Bank charges $ 32 $ 2,907 $ 32 Adjusted bank balance $ 26,443 Adjusted book balance $ 26,443 The error in recording check - $89 was recorded in cash book instead of $80 so it resulted in error of $89-$80 = $9 All the transactions if and when recorded will be added to the unadjusted balance if it leads to increase in balance and is to be subtracted if it leads to decrease in balance .