Adjusted cash balances?
Leng Xiong is unable to reconcile the bank balance as of January 31. The reconciliation presented is as follows:
Instructions:
(a) What is the correct adjusted cash balance per bank?
(b) What is the correct adjusted cash balance per books?
(c) Prepare the necessary adjusting journal entries to determine the adjusted cash balance per books.
- Cash balance per bank: $3,660.20
- Add: NSF check: $370.00
- Less: Bank service charge: $25.00
-
Adjusted balance per bank: $4,005.20
-
Cash balance per books: $3,975.20
- Less: Deposits in transit: $590.00
- Add: Outstanding checks: $670.00
- Adjusted balance per books: $4,055.20
1 Answers
(a) What is the proper adjusted cash balance per bank?
Cash balance per bank $3,660.20
Add: Deposits in transit 590.00
Less: Outstanding checks 670.00
adjusted cash balance per bank $3,580.20
(b) What is the proper adjusted cash balance per books?
Cash balance per books $3,975.20
Less: NSF check 370.00
Less: Bank service charge 25.00
adjusted cash balance per books $3,580.20
(c) Prepare the adjusting journal entries necessary to determine the adjusted cash balance per books
Dr AR 370
Cr Cash 370
Dr Bank charges 25
Cr Cash 25
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