Flynn Company's monthly bank statement showed the ending balance of cash of $18,500.The bank reconciliation for the period showed an adjustment for a deposit in transit of $1,500, outstanding checks of $2,000, a NSF check of $700, bank service charges of $30 and the EFT from a customer in payment of the customer's account of $1,500.
-Use the information above to answer the following question.What was the cash balance on the company's books (before the adjustments for items on the bank reconciliation)?

Question

Quizplus · Accepted Answer

To find the cash balance on the company's books before the adjustments, we need to add the adjustments to the ending balance on the bank statement. 
- Deposit in transit: +$1,500 
- Outstanding checks: -$2,000 
- NSF check: -$700 
- Bank service charges: -$30 
- EFT from customer: +$1,500

Adjusted ending balance: 
$18,500 + $1,500 - $2,000 - $700 - $30 + $1,500 = $19,770

Therefore, the cash balance on the company's books before the adjustments is $19,770. However, the closest option to this amount is option B, $17,230 (which is the incorrect balance before adjustments).

Flynn Company's Monthly Bank Statement Showed the Ending Balance of Cash