As of June 30, Year 2, the bank statement showed an ending balance of $18,039. The unadjusted Cash account balance was $17,093. The following information is available: Deposit in transit $2,905.
Credit memo in bank statement for interest earned in June $22.
Outstanding check $3,836
Debit memo for service charge $7

Required:
Determine the true cash balance by preparing a bank recondiliation as of June 30, 2016.

the true cash balance is $17,108

Explanation:

First, update the Cash Book Bank Balance as follows :

Cash Book Bank (Balances Only)

Debit :

Balance as per Cash Book                                          $17,093

Interest Earned                                                                   $22

Totals                                                                              $17,115

Credit :

Service charge                                                                     $7

Balance as per updated Cash Book (Balance)           $17,108

Totals                                                                              $17,115

Next, Prepare a Bank Reconciliation Statement as follows :

Bank Reconciliation Statement

Balance as per Bank Statement                                $18,039

Add Lodgements not yet credited                             $2,905

Less Unpresented Cheques                                      ($3,836)

Balance as per Cash Book                                          $17,108

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