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27 September, 09:51

In the process of reconciling its bank statement for January, Maxi's Clothes accountant compiles the following information: Cash balance per company books on January 30 $ 4,725 Deposits in transit at month-end $ 1,800 Outstanding checks at month-end $ 520 Bank service charges $ 25 EFT automatically deducted monthly, not yet recorded by Maxi $ 380 An NSF check returned on a customer account $ 265.

The adjusted cash balance per the books on January 31 is

a. $5,855

b. $5,335

c. $4,055

d. $4,815

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Answers (1)
  1. 27 September, 10:10
    0
    Option (c) is correct.

    Explanation:

    Given that,

    Cash balance per company books on January 30 = $4,725

    Deposits in transit at month-end = $ 1,800

    Outstanding checks at month-end = $ 520

    Bank service charges = $ 25

    EFT deduction = $380

    NSF check returned on a customer account = $ 265

    Adjusted cash balance as per books:

    = Unadjusted book balance - Bank Service charge - EFT deduction - NSF check

    = $4,725 - $25 - $380 - $265

    = $4,055
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