Question

A bank statement shows a balance of $8,445 at June 30. The bank reconciliation is prepared and includes outstanding checks of $2,790, deposits in transit of $1,350, and a bank service charge of $30. Among the paid checks returned by the bank was check no. 900 in the amount of $600, which the company had erroneously recorded in the accounting records as $60. The "adjusted cash balance" at June 30 is:

Answer 1

$7,095

Explanation:

The computation of adjusted cash balance is shown below:-

Adjusted cash balance = Balance as per Bank Statement + Deposit in transit - Outstanding checks + bank Service charge + returned paid check no.900

= $8,445 + $1,350 - $2,790 + $30 + $60

= $7,095

Therefore for computing the adjusted cash balance we simply applied the above formula.