The May bank statement for Accounting Services shows a balance of $6,300,but the balance per books shows a cash balance of $7,980.Other information includes:
1)A check for $200 to pay the electric bill was recorded on the books as $20.
2)Included on the bank statement was a note collected by the bank for $400 plus interest of $30
3)Checks outstanding totaled $260.
4)Bank service charges were $50.
5)Deposits in transit were $2,140.
-According to the above Scenario.The adjusted cash balance at the end of August should be:
A)$9,810.
B)$7,620.
C)$7,980.
D)$8,180.

Question

The May bank statement for Accounting Services shows a balance of $6,300,but the balance per books shows a cash balance of $7,980.Other information includes: 
1)A check for $200 to pay the electric bill was recorded on the books as $20.
2)Included on the bank statement was a note collected by the bank for $400 plus interest of $30
3)Checks outstanding totaled $260.
4)Bank service charges were $50.
5)Deposits in transit were $2,140.
-According to the above Scenario.The adjusted cash balance at the end of August should be:
A)$9,810.
B)$7,620.
C)$7,980.
D)$8,180.

Quizplus · Accepted Answer

Starting with the balance per books of $7,980, we need to make adjustments for the following: 
1) Add back the $180 difference between the recorded check amount and the actual check amount ($200 - $20) to get a new balance of $8,160.
2) Add the collected note of $430 ($400 + $30) to get a new balance of $8,590.
3) Subtract outstanding checks of $260 to get a new balance of $8,330.
4) Subtract bank service charges of $50 to get a new balance of $8,280.
5) Add deposits in transit of $2,140 to get a final adjusted cash balance of $10,420. 
Therefore, the correct answer is D ($8,180).

The May Bank Statement for Accounting Services Shows a Balance