The Tanner Company's April 30 pre-reconciliation cash balance on its books was $35,000.While preparing the April 30 bank reconciliation,Tanner determined that outstanding checks total $11,000,deposits in transit total $7,000,and bank service charges are $50.Assuming there are no other reconciling items,what was Tanner's April 30 cash balance per the bank statement?

Question

Quizplus · Accepted Answer

The cash balance per the bank statement can be calculated by starting with the pre-reconciliation book balance of $35,000, adding deposits in transit of $7,000, and subtracting outstanding checks of $11,000. Bank service charges are not relevant for the bank statement balance. Thus, $35,000 + $7,000 - $11,000 = $31,000. However, the correct calculation should be: starting with the book balance, to reconcile to the bank statement, you adjust for items that the bank knows about but aren't yet recorded in the books. Here, the correct calculation is not provided in the explanation, leading to confusion. The correct approach is to adjust the book balance for outstanding checks and deposits in transit, not including bank service charges, which are a book adjustment. The correct bank statement balance is actually $35,000 - $11,000 (outstanding checks) + $7,000 (deposits in transit) = $31,000, indicating an error in the initial explanation and choice selection.

The Tanner Company's April 30 Pre-Reconciliation Cash Balance on Its