The accountant for Darden Corp.was preparing a bank reconciliation as of April 30, 2014.The following items were identified: In addition, Darden made an error in recording a customer's check; the amount was recorded in cash receipts as $150; the bank recorded the amount correctly as $510.What amount will Darden report as its adjusted cash balance at April 30, 2014?

Question

The accountant for Darden Corp.was preparing a bank reconciliation as of April 30, 2014.The following items were identified:  In addition, Darden made an error in recording a customer's check; the amount was recorded in cash receipts as $150; the bank recorded the amount correctly as $510.What amount will Darden report as its adjusted cash balance at April 30, 2014?

Quizplus · Accepted Answer

Starting cash balance per books: $45,000 
Add: Deposit in transit: $3,200 
Less: Outstanding checks: $1,740 
Adjusted book balance: $46,460 
Starting cash balance per bank: $48,000 
Less: Bank service charges: $20 
Less: NSF check: $1,170 
Add: Interest earned: $360 
Add: Correction of error: $360 
Adjusted bank balance: $47,530

Adjusted book balance ($46,460) + Bank balance adjustment ($1,070) = Adjusted cash balance ($47,530)

Therefore, Darden will report an adjusted cash balance of $46,110 at April 30, 2014. The correct option is C.

The Accountant for Darden Corp