Flynn Company's monthly bank statement showed the ending balance of cash of $22,750. The bank reconciliation for the period showed an adjustment for a deposit in transit of $2,300, outstanding checks of $3,250, a NSF check of $870, bank service charges of $30 and the EFT from a customer in payment of the customer's account of $1,670. What is the adjusted cash balance at the end of the month?

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19 November, 10:30

Flynn Company's monthly bank statement showed the ending balance of cash of $22,750. The bank reconciliation for the period showed an adjustment for a deposit in transit of $2,300, outstanding checks of $3,250, a NSF check of $870, bank service charges of $30 and the EFT from a customer in payment of the customer's account of $1,670. What is the adjusted cash balance at the end of the month?

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Timothy Gallagher · Answer 1

The adjusted cash balance at the end of the month is $21,800

Explanation:

Since we have to compute the cash balance but in the the question, bank statement balance is given. So, we have to do the back calculations. For that, first we have to find the adjusted bank balance which is shown below:

Adjusted bank balance = Ending bank balance + deposit in transit - outstanding checks

= $22,650 + $23,00 - $3,250

= $21,800

Now we have to find the balance before adjustment which is computed below:

= Adjusted balance + bank service charge + NSF check - EFT

= $21,800 + $30 + $870 - $1,670

= $21,030

So, the adjusted cash balance would be

= Cash book balance + EFT - bank service charges - NSF check

= $21,030 + $1,670 - $30 - $870

= $21,800