Egrane,Inc.'s monthly bank statement showed the ending balance of cash of $14,800.The bank reconciliation for the period showed an adjustment for a deposit in transit of $1,200,outstanding checks of $1,600,a NSF check of $560,bank service charges of $24 and the EFT from a customer in payment of the customer's account of $1,200. What was the cash balance on the Egrane's books (before the adjustments for items on the bank reconciliation)?

Question

Quizplus · Accepted Answer

Start with updates to bank statement and back into ending cash balance per books.
Up-to-date ending cash balance = Balance per the bank + Deposits in transit − Outstanding checks
= $14,800 + $1,200 − $1,600 = $14,400
Up-to-date ending cash balance = Ending cash balance per book − NSF check − Bank service charges + EFT
Ending cash balance per books = Up-to-date ending cash balance + NSF check + Bank service charges − EFT
= $14,400 + $560 + $24 − $1,200 = $13,784