Rainey Company's true cash balance at October 31 is $5,710. The following information is available for the bank reconciliation:Outstanding checks, $600Deposits in transit, $450Bank service charges, $90The bank had collected an account receivable for Rainey Company, $1,000The bank statement included a NSF check written by one of Ramsey's customers for $600.What was the unadjusted book balance at October 31?

Question

Quizplus · Accepted Answer

The unadjusted book balance is calculated by adjusting the true cash balance for items not yet recorded in the books. Starting with the true cash balance of $5,710, add the bank service charges ($90) and the NSF check ($600) since these reduce the book balance, and subtract the account receivable collected by the bank ($1,000) since this increases the book balance. The calculation is: $5,710 - $90 - $600 + $1,000 = $5,400.

Rainey Company's True Cash Balance at October 31 Is $5,710