In preparing its May 31, 2010 bank reconciliation, Kerrigan Co.has the following information available: The correct balance of cash at May 31, 2010 is

Question

In preparing its May 31, 2010 bank reconciliation, Kerrigan Co.has the following information available:  The correct balance of cash at May 31, 2010 is

Quizplus · Accepted Answer

To find the correct balance of cash at May 31, 2010, we need to start with the balance according to the company's records and make adjustments for any reconciling items.

Starting balance according to company's records: $42,300
Add: Deposits in transit as of May 31: $9,800
Subtract: Outstanding checks as of May 31: $7,400
Subtract: Bank service charge: $100
Add: Note receivable and interest collected by bank: $300
Subtract: NSF check: $1,200

Adjusted balance: $44,700

Therefore, the correct balance of cash at May 31, 2010 is $44,700, so the best choice is B).

In Preparing Its May 31, 2010 Bank Reconciliation, Kerrigan Co