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The Fitzgerald Company maintains a checking account at the Bank of the North. The bank provides a bank statement along with canceled checks on the last day of each month.

The company's general ledger cash (checking) account had a balance of $42,544 at the end of January 2017. Deposits outstanding totaled $4,224, and all checks written by the company were processed by the bank except for those totaling $5,620. In addition, a check for $500 for the purchase of office furniture was incorrectly recorded by the company as a $50 disbursement. The bank correctly processed the check during January. The monthly loan payment is deducted directly by the bank from the account and includes $400 in interest.

The January 31, 2017, bank statement included the following information:

Balance as of January 1, 2017	$ 32,690
Deposits	86,000
Checks Processed	-75,200
Service Charges	-350
NSF checks	-1,600
Monthly loan payment	-3,400
Balance as of January 31, 2017	$ 38,140

Determine how each of the items described above would be used in a bank reconciliation.

General ledger balance of $42,544

[ Choose ] Subtract to determine adjusted book balance Add to determine adjusted bank balance Subtract to determine adjusted bank balance Add to determine adjusted book balance Not used in reconciliation

Deposits outstanding of $4,224

[ Choose ] Subtract to determine adjusted book balance Add to determine adjusted bank balance Subtract to determine adjusted bank balance Add to determine adjusted book balance Not used in reconciliation

Unprocessed checks of $5,620

[ Choose ] Subtract to determine adjusted book balance Add to determine adjusted bank balance Subtract to determine adjusted bank balance Add to determine adjusted book balance Not used in reconciliation

Check recorded in error for $50

[ Choose ] Subtract to determine adjusted book balance Add to determine adjusted bank balance Subtract to determine adjusted bank balance Add to determine adjusted book balance Not used in reconciliation

Monthly loan payment of $3,400

[ Choose ] Subtract to determine adjusted book balance Add to determine adjusted bank balance Subtract to determine adjusted bank balance Add to determine adjusted book balance Not used in reconciliation

Bank balance of $32,690

[ Choose ] Subtract to determine adjusted book balance Add to determine adjusted bank balance Subtract to determine adjusted bank balance Add to determine adjusted book balance Not used in reconciliation

Total deposits of $86,000

[ Choose ] Subtract to determine adjusted book balance Add to determine adjusted bank balance Subtract to determine adjusted bank balance Add to determine adjusted book balance Not used in reconciliation

Checks processed of $75,200

[ Choose ] Subtract to determine adjusted book balance Add to determine adjusted bank balance Subtract to determine adjusted bank balance Add to determine adjusted book balance Not used in reconciliation

Service charges of $350

[ Choose ] Subtract to determine adjusted book balance Add to determine adjusted bank balance Subtract to determine adjusted bank balance Add to determine adjusted book balance Not used in reconciliation

Returned (NSF) check of $1,600

[ Choose ] Subtract to determine adjusted book balance Add to determine adjusted bank balance Subtract to determine adjusted bank balance Add to determine adjusted book balance Not used in reconciliation

Bank balance of $38,140

Answer & Explanation Solved by verified expert

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