Calculate, from the following information accumulated by Vera Freese, the adjusted cash balance at the end of April. Bank statement ending cash balance $3,000
General ledger cash balance ending 4,250
Bank monthly service charge 45
Deposits in transit 2,500
Outstanding cheques 1,500
NSF cheque returned with bank statement 205
A) $3,000
B) $4,250
C) $4,000
D) $5,500

Question

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Starting with the bank statement ending cash balance of $3,000, we add deposits in transit of $2,500 to get a subtotal of $5,500. However, we need to subtract outstanding cheques of $1,500 to account for the fact that those cheques have not yet cleared the bank. This gives us an adjusted subtotal of $4,000. We also need to subtract the bank monthly service charge of $45, as this is an expense that has already been deducted by the bank. Finally, we need to subtract the NSF cheque returned with the bank statement, as this reduces the amount of cash available to us. This brings us to a final adjusted cash balance of $3,750. However, we are not given this option, so the closest answer is C, which is $4,000.

Calculate, from the Following Information Accumulated by Vera Freese, the Adjusted