Blue Company Is Unable to Reconcile the Bank Balance at January

Essay

Blue Company is unable to reconcile the bank balance at January 31. Blue's reconciliation is as follows. $$\begin{array} { l r } \text { Cash balance per bank } & \$ 5,300 \\\text { Add: NSF check } & 1,490 \\\text { Less: Bank service charge } & \underline{25 }\\\text { Adjusted balance per bank } & \$ 6,765 \\\\\text { Cash balance per books } & \$ 5,905 \\\text { Less: Deposits in transit } & 950 \\\text { Add: Outstanding checks } & \underline{1,860 }\\\text { Adjusted balance per books } & \underline{\$ 16,815} \\\end{array}$$ Instructions
(a) Prepare a correct bank reconciliation.
(b) Journalize the entries required by the reconciliation.