Jim Lee received his bank statement from Bayne Bank indicating a balance of $7,980. Lee's checkbook showed a balance of $6,800. Jim noticed that checks outstanding were $1,330. The bank statement also revealed an NSF check for $120 and a service charge of $30. The reconciled balance is:

Given:

Bayne Bank indicating a balance of $7,980.

Lee's checkbook showed a balance of $6,800.

checks outstanding were $1,330.

NSF check for $120 and a service charge of $30.

Bank balance: 7,980

less: outstanding checks (1,330)

Bank balance, end 6,650

Jim's checkbook balance: 6,800

less: NSF check 120

service charge 30 (150)

Jim's balance, end 6,650

The reconciled balance is: $6,650.

In reconciling the bank balance, we need to add the deposits in transit and deduct the outstanding checks. This are all transactions reflected in the book but not yet reflected in the bank account.

In reconciling the book balance, we need to add the credits made in the bank account and deduct the debits like service charges.