Owen Company's unadjusted book balance at June 30 is $10,220. The company's bank statement reveals bank service charges of $65. Two credit memos are included in the bank statement: one for $1,050, which represents a collection that the bank made for Owen, and one for $90, which represents the amount of interest that Owen had earned on its interest-bearing account in June. What is the true cash balance?

Question

Quizplus · Accepted Answer

The true cash balance is calculated by adjusting the unadjusted book balance for bank service charges and credit memos. Start with the unadjusted book balance of $10,220, subtract the bank service charges of $65, and add the credit memos of $1,050 and $90. The calculation is: $10,220 - $65 + $1,050 + $90 = $11,295.

Owen Company's Unadjusted Book Balance at June 30 Is $10,220