Book Balance : $2,490 Bank Balance: $3,360 Add: Add: Ryan Saar payment 680 Deposits in Transit 300 Interest Revenue 10 Less: Less: Service Charge ($20) Outstanding Checks (500) =========== ========== Cash Balance $3,160 Bank Balance $3,160 *The payment made by Ryan Saar was directly deposited to the bank; therefor, it is not yet recorded in the company books. The same with the Interest Revenue Earned and Service Charge Fees. *The Deposits in Transit and Outstanding Checks are not yet recorded in the bank because the deposits are still in transit while the outstanding checks are not yet cashed; however, these items were already recorded in the company books.
The Cash account of Safe and Secure Security Systems reported a balance of $2,490 at May 31, 2011. There were outstanding checks totaling $500 and a May 31 deposit in transit of $300. The bank statement, which came from Tri Cities Bank, listed the May 31 balance of $3,360. Included in the bank balance was a collection of $680 on account from Ryan Saar, a Safe and Secure customer who pays the bank directly. The bank statement also shows a $20 service charge and $10 of interest revenue that Safe and Secure earned on its bank balance. Prepare Safe and Secure’s bank reconciliation at May 31.