Question

The Conner Company's August 31 pre-reconciliation cash balance on its books was $91,000. As of August 31, outstanding checks total $44,400 and deposits in transit total $30,200. Assuming there are no other reconciling items, what was the August 31 cash balance on Conner's bank statement?

Answer 1

The cash balance on Conner Company's bank statement as of August 31 is $76,800, calculated by taking the pre-reconciliation cash balance on the books, subtracting outstanding checks, and adding deposits in transit.

Step-by-step explanation:

The student has asked about calculating the cash balance on a bank statement given a pre-reconciliation cash balance and the values of outstanding checks and deposits in transit. To find the cash balance on the bank statement for Conner Company as of August 31, we start with the cash balance on the company's books and adjust for outstanding checks and deposits in transit. The pre-reconciliation cash balance on Conner's books was $91,000. Outstanding checks of $44,400 are subtracted from this amount because they have been recorded on the company's books but have not yet cleared the bank account. On the other hand, deposits in transit totaling $30,200 are added because they have been received and recorded by the company but not yet reflected on the bank statement. Therefore, the cash balance on the bank statement can be calculated as follows:

Cash balance on the bank statement = Pre-reconciliation cash balance – Outstanding checks + Deposits in transit

Cash balance on the bank statement = $91,000 - $44,400 + $30,200

Cash balance on the bank statement = $76,800

Answer 2

After accounting for outstanding checks and deposits in transit, the cash balance on Conner's bank statement as of August 31 would be $76,800.

Step-by-step explanation:

To calculate the August 31 cash balance on Conner's bank statement, we need to adjust the pre-reconciliation balance in the company's books for outstanding checks and deposits in transit. The pre-reconciliation cash balance according to the company's books is $91,000. Outstanding checks of $44,400 need to be subtracted from this balance because they have been recorded by the company but not yet cleared by the bank. Deposits in transit of $30,200 need to be added to the balance since they have been received by the company but not yet processed by the bank.

Here's the calculation:

• Pre-reconciliation balance (from Conner's books): $91,000
• Outstanding checks: -$44,400
• Deposits in transit: +$30,200
• Bank statement balance: Pre-reconciliation balance - Outstanding checks + Deposits in transit

The adjusted bank statement balance would therefore be:

$91,000 (pre-reconciliation balance) -$44,400 (outstanding checks) +$30,200 (deposits in transit) = $76,800

Thus, the cash balance on Conner's bank statement as of August 31 would be $76,800.