1. Financial Algebra © 2011 Cengage Learning. All Rights Reserved. Slide 1 3-2 RECONCILE A BANK STATEMENT Reconcile a checking account with a bank statement by hand and by using a spreadsheet. OBJECTIVES

2. Financial Algebra © 2011 Cengage Learning. All Rights Reserved. Warm-upWarm-up Solve the equation for the price, P. The formula for finding the sale price, S, on an item costing P dollars after a D% discount is S=P(1 – D/100). Slide 2

3. Financial Algebra © 2011 Cengage Learning. All Rights Reserved. Slide 3 account number – appears on all bank statement – includes all transactions statement period – dates the transactions occurred starting balance – amount at beginning of period ending balance – amount at end of period outstanding deposits – deposits that did not appear outstanding checks – checks that did not appear balancing – a checkbook to verify bank’s records reconciling – a bank statement to verify bank’s records Key Terms

4. Financial Algebra © 2011 Cengage Learning. All Rights Reserved. Slide 4 The next slide has a bank statement and check register for Michael Biak’s checking account. What steps are needed to reconcile Michael’s bank statement? Example 1

5. Financial Algebra © 2011 Cengage Learning. All Rights Reserved. Slide 5

6. Financial Algebra © 2011 Cengage Learning. All Rights Reserved. Slide 6 Name some reasons why a check may not have cleared during the monthly cycle and appear on the bank statement. CHECK YOUR UNDERSTANDING

7. Financial Algebra © 2011 Cengage Learning. All Rights Reserved. Slide 7 Example 2 Use algebraic formulas and statements to model the check register balancing process.

8. Financial Algebra © 2011 Cengage Learning. All Rights Reserved. Slide 8 Nancy has a balance of $1,078 in her check register. The balance on her bank account statement is $885.84. Not reported on her bank statement are deposits of $575 and $250 and two checks for $195 and $437.84. Is her check register balanced? Explain. CHECK YOUR UNDERSTANDING

9. Financial Algebra © 2011 Cengage Learning. All Rights Reserved. Slide 9 EXAMPLE 3 Marina and Brian have a joint checking account. They have a balance of $3,839.25 in the check register. The balance on the bank statement is $3,450.10. Not reported on the statement are deposits of $2,000, $135.67, $254.77, and $188.76 and four checks for $567.89, $23.83, $598.33, and $1,000. Reconcile the bank statement using a spreadsheet.

10. Financial Algebra © 2011 Cengage Learning. All Rights Reserved. Slide 10 Write a formula to calculate the sum of the outstanding checks. CHECK YOUR UNDERSTANDING

11. Financial Algebra © 2011 Cengage Learning. All Rights Reserved. AssignmentAssignment Pages 127 – 130, #2 – 12 even Slide 11