The balance shown in the August bank statement of Colt Company was $23,200. After examining the August bank statement and items included with it, the company's accountant found: Checks outstanding $4,300 NSF check 140 Note collected by bank for the Colt Company 1,200 Deposits outstanding 1,800 Bank service fees 60 What is the amount of cash that should be reported in the balance sheet as of August 31? Select one: A. $22,200. B. $20,700. C. $18,700. D. $17,200.

Question

Lexie Friedman

Business

25 May, 22:27

The balance shown in the August bank statement of Colt Company was $23,200. After examining the August bank statement and items included with it, the company's accountant found: Checks outstanding $4,300 NSF check 140 Note collected by bank for the Colt Company 1,200 Deposits outstanding 1,800 Bank service fees 60 What is the amount of cash that should be reported in the balance sheet as of August 31? Select one: A. $22,200. B. $20,700. C. $18,700. D. $17,200.

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Answers (1)

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Cayden Ashley · Answer 1

The answer is: B) $20,700

Explanation:

Colt Company has to record all the deposits in transit and all the checks outstanding. Deposits in transit increase the cash account while checks outstanding will decrease the cash account.

Cash account = $23,200 (Colt Company's bank statement) - $4,300 (checks outstanding) + $1,800 (deposits outstanding) = $20,700