The May bank statement for Legal Services shows a balance of $6,000,but the balance per books shows a cash balance of $7,680.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.
The adjusted cash balance at the end of May should be:
A)$9,810.
B)$7,620.
C)$7,150.
D)$7,880.

Question

Quizplus · Accepted Answer

Start with the balance per books of $7,680 and add deposits in transit of $2,140 to get a subtotal of $9,820. Then subtract the total of outstanding checks ($260), the incorrectly recorded electric bill payment (-$180), and bank service charges (-$50) to get an adjusted cash balance of $7,880, which matches option D. Adding the note collected by the bank for $400 plus interest of $30 is not necessary since it is already reflected in the balance per books.

The May Bank Statement for Legal Services Shows a Balance