On October 31, 2015, the bank statement shows that your company has $12,956.73 in its checking account. You are aware of three outstanding checks for a total of $2,112.19. During October, 2015, the bank rejected two deposited checks from customers totaling $654.19 because of insufficient funds and charged you $12.00 in service fees. You had not yet received notice about the bad checks, but you were aware of and have recorded the $12.00 of service fees. Prior to adjustment on October 31, 2015, your Cash account would have a balance of:

A. $14,402.73.

B. $15,711.11.

C. $11,498.73.

D. $10,202.35.

Question

Guest

Business

3 February, 13:59

On October 31, 2015, the bank statement shows that your company has $12,956.73 in its checking account. You are aware of three outstanding checks for a total of $2,112.19. During October, 2015, the bank rejected two deposited checks from customers totaling $654.19 because of insufficient funds and charged you $12.00 in service fees. You had not yet received notice about the bad checks, but you were aware of and have recorded the $12.00 of service fees. Prior to adjustment on October 31, 2015, your Cash account would have a balance of:

A. $14,402.73.

B. $15,711.11.

C. $11,498.73.

D. $10,202.35.

+1

Answers (1)

Know the Answer?

Jasper Briggs · Answer 1

C. $11,498.73.

Explanation:

Solving this question, we will have to make use of this formula:

The Adjusted Bank Balance = Unadjusted Balance as per Bank Statement as at Oct 31, 2015 - Checks Outstanding

= $12,956.73 - $2,112.19 = $10,844.54

Now,

Before the adjustment on the 31st of October, 2015,

The Cash account Balance = Adjusted Bank Balance + insufficient funds checks

= $10,844.54 - $654.19 = $11,498.73

Hence third option in the question is the correct answer.