1. The problem involves understanding and reconciling bank statement and book record data, focusing on cash receipts, cash payments, and balances. 2. To analyze such financial data, the key formula is the bank reconciliation equation: $$\text{Adjusted Book Balance} = \text{Book Balance} + \text{Deposits in Transit} - \text{Outstanding Checks}$$ 3. Important rules: - Deposits in transit are amounts recorded in the books but not yet reflected in the bank statement. - Outstanding checks are checks issued but not yet cleared by the bank. 4. From the BANK STATEMENT, note the dates, deposits, checks, and balances. 5. From the BOOK RECORD, note cash receipts (deposits) and cash payments (checks) with their dates and amounts. 6. To reconcile, identify which deposits and checks have cleared the bank and which have not. 7. Calculate the adjusted book balance by adding deposits in transit and subtracting outstanding checks from the book balance. 8. This process ensures the book balance matches the bank statement balance after adjustments. Final answer: The reconciliation process uses the formula $$\text{Adjusted Book Balance} = \text{Book Balance} + \text{Deposits in Transit} - \text{Outstanding Checks}$$ to align the book records with the bank statement.