4-1

When the cashier asks, Debit or Credit a sneaky little bank fee sometimes hangs
in the balance, depending on where you bank and sometimes what kind of debit
card account you have. Carolyn Croswell, who banks in New Jersey, wants to
balance her checkbook, which shows a balance of $985.20. The bank shows a
balance of $1,430.33. The following transactions occurred: $135.20 automatic
withdrawals to the gas company, $6.50 ATM Fee, $8.00 service fee, and $1,030.05
direct deposit from the IRS. Carolyn used her debit card 5 times and was charged
45 cents for each transaction: she was also charged $3.50 for check printing. A
$931.08 deposit was not shown on her bank statement. The following checks were
outstanding: #235, $158.20: #237, $184.13: # 238, $118.12: # 239, $38.83.
Carolyn received $2.33 interest. Prepare Carolyns bank reconciliation.

2
Melissa Jackson, a bookkeeper cannot prepare a bank reconciliation. From the
following facts, complete the June 30, 2007 reconciliation. The bank statement
showed a $2,955.82 balance. Melissas checkbook showed a $3,301.82 balance.

Melissa placed a $510.19 deposit in the banks night depository on June 30. The
deposit did not appear on the bank statement. The bank included two DMs and
one CM with the returned checks: $690.65 DM for NSF, $8.50 DM for service
charges, and $400.00 CM (less $10 collection fee) for collection a $400.00 noninterest bearing note. Check # 811 for $110.94 and # 912 for $82.50 were both
written and recorded on June 28, were not with the returned checks. The
bookkeeper had correctly written check #844 for $1,000.00 for a new cash register,
but she recorded the check as $1,069.00. The May bank reconciliation showed
check # 748 for $210.90 and # 710 for $195.80 outstanding on April 30. The June
bank statement included check # 710 but not check # 748.