In preparing its August 31 bank reconciliation, Ghana Corp.has the following information available: Ghana's correct cash balance at August 31 is

Question

In preparing its August 31 bank reconciliation, Ghana Corp.has the following information available:  Ghana's correct cash balance at August 31 is

Quizplus · Accepted Answer

Starting with Ghana Corp.'s balance per bank of $31,140, we add deposits in transit of $5,700 and subtract outstanding checks of $2,100 to get an adjusted balance per bank of $34,740.
Starting with Ghana Corp.'s balance per books of $32,240, we subtract a bank service charge of $100 and NSF check of $1,000 to get an adjusted balance per books of $31,140.
Comparing the adjusted balances per bank and books, we see a difference of $3,600 ($34,740 - $31,140), which is explained by the deposit in transit. Thus, the correct cash balance at August 31 is $32,140 ($31,140 + $5,700 - $2,100 - $100 - $1,000).

In Preparing Its August 31 Bank Reconciliation, Ghana Corp