The cash account shows a balance of $45,000 before reconciliation. The bank statement does not include a deposit of $2,300 made on the last day of the month. The bank statement shows a collection by the bank of $940 and a customer's check for $320 was returned because it was NSF. A customer's check for $450 was recorded on the books as $540, and a check written for $79 was recorded as $97. The correct balance in the cash account was

Question

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The correct balance is calculated as follows: Start with the book balance of $45,000. Add the deposit in transit of $2,300. Add the bank collection of $940. Subtract the NSF check of $320. Correct the customer's check error by adding $90 ($540 - $450). Correct the check written error by adding $18 ($97 - $79). The correct balance is $45,000 + $2,300 + $940 - $320 + $90 + $18 = $45,548.

The Cash Account Shows a Balance of $45,000 Before Reconciliation