The bank statement of July 31, for Savon Co. showed a balance of $6,008.10, and the checkbook showed a balance of $1,900.40. The bookkeeper of Savon Co. noticed from the bank statement that the bank had collected a note for $666.66. There was a deposit in transit made on July 1, for $1,100.10 along with the outstanding checks of $4,580.54. Check charges were $39.40. The reconciled balance is:

Question

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Starting with the balance on the bank statement ($6,008.10), we add the deposit in transit ($1,100.10) and subtract the outstanding checks ($4,580.54). This gives us an adjusted balance of $2,527.66.

Next, we need to take into account the bank collecting the note for $666.66, which means we need to add that to our adjusted balance.

Finally, we need to subtract the check charges of $39.40.

Adjusted balance ($2,527.66) + collected note ($666.66) - check charges ($39.40) = $3,155.92.

However, this is not the final reconciled balance because we still need to compare our checkbook balance to the adjusted balance.

Starting with the checkbook balance ($1,900.40), we add any deposits or other credits that have not yet cleared the bank, which in this case is zero. Then we subtract any outstanding checks or other debits that have not yet cleared the bank, which in this case is $4,580.54.

Checkbook balance ($1,900.40) - outstanding checks ($4,580.54) = -$2,680.14.

Now our final step is to add the checkbook balance ($1,900.40) to the adjusted balance ($3,155.92) to get the reconciled balance.

Reconciled balance ($1,900.40 + $3,155.92) = $5,056.32, which rounds up to $5,056.30.

Therefore, the answer is C) $2,527.66.

The Bank Statement of July 31, for Savon Co