The bank statement for Tetra Company contained the following items: a bank service charge of $80; a credit memo for interest earned, $85; and a $190 NSF check from a customer. The company had outstanding checks of $450 and a deposit in transit of $1,000. Assuming that the unadjusted bank balance was $2,000, what is the unadjusted book balance?

adjus. Bal book cash balance: $ 2,735

Explanation:

we do reconciliation on the bank balance:

BANK

Balance 2,000

Outstanding Check - 450

Deposit in transit 1,000

Adjusted Balance 2,550

Now we reverse from the adjusted balance to get the unadjusted cash balance:

adjusted 2,550

Service Charge + 80 * 1

interest - 85 * 2

NSF + 190 * 1

adjus. Bal 2,735

*1 (in the reconciliation they decrease the unadjusted balance so, we reverse to positive)

*2 in the reconciliation the interest increase the unadjusted balance, the reverse will be a negavite impact.