Question

If the month-end bank statement shows a balance of $72,000, outstanding checks are $24,000, a deposit of $8,000 was in transit at month end, and a check for $1,000 was erroneously charged by the bank against the account, the correct balance in the bank account at month end is

A) $57,000.
B) $87,000.
C) $41,000.
D) $55,000.

Answer 1

By adjusting the month-end bank statement balance for outstanding checks, deposits in transit, and an erroneous charge, the correct bank account balance at month end is determined to be $57,000.

Step-by-step explanation:

To find the correct balance in the bank account at month end, we need to adjust the bank statement by accounting for the outstanding checks, the deposit in transit, and the erroneous charge.

• Start with the bank statement balance: $72,000.
• Subtract outstanding checks: $72,000 - $24,000 = $48,000.
• Add the deposit in transit: $48,000 + $8,000 = $56,000.
• Add back the erroneous charge: $56,000 + $1,000 = $57,000.

The correct balance in the bank account at month end is $57,000.