Bank Reconciliation for Statement Balance

Steps:

• Update cash book for unrecorded bank charges: subtract $50 from$400 to get adjusted cash book balance of $350.
• Adjust for lodgements recorded in cash book but not on bank statement: subtract $220 from$350 to account for bank not crediting them yet.
• Adjust for cheques issued but not cleared: add $150 to previous result, as bank has not debited them.
• Final bank statement balance: $130 +$150 = $280 (reconciled figure per bank records).

Why A is correct:

• A matches the bank statement balance using the standard reconciliation formula: adjusted cash book - outstanding lodgements + uncleared cheques, ensuring books and bank align per accounting principles.

Why the others are wrong:

• B omits uncleared cheques adjustment, overstating the balance.
• C adds lodgements instead of subtracting, ignoring their timing effect on bank records.
• D adds all items without netting timing differences, violating reconciliation rules.

Final answer: A