The following information is needed to reconcile the cash balance for Fire Steel Ltd:
? A deposit of $5500 is in transit.
? Outstanding cheques total $1500.
? The book balance is $6500 at 28 February 2017.
? The bookkeeper recorded a $1800 cheque as $17,100 in payment of the current month's rent.
? The bank balance at 28 February 2017 was $19,040.
? A deposit of $500 was credited by the bank for $5000.
? A dishonoured cheque from a customer for $3200 was returned by the bank.
? The bank service charge is $60.
What was the adjusted bank balance?

Question

The following information is needed to reconcile the cash balance for Fire Steel Ltd: 
? A deposit of $5500 is in transit.
? Outstanding cheques total $1500.
? The book balance is $6500 at 28 February 2017.
? The bookkeeper recorded a $1800 cheque as $17,100 in payment of the current month's rent.
? The bank balance at 28 February 2017 was $19,040.
? A deposit of $500 was credited by the bank for $5000.
? A dishonoured cheque from a customer for $3200 was returned by the bank.
? The bank service charge is $60.
What was the adjusted bank balance?

Quizplus · Accepted Answer

Starting with the book balance of $6,500:
- Add the deposit in transit of $5,500 to get a subtotal of $12,000.
- Subtract the outstanding cheques of $1,500 to get a new subtotal of $10,500.
- Subtract the amount of the incorrectly recorded cheque ($17,100 - $1,800 = $15,300) to get a new subtotal of -$4,800 (overdraft).
- Add the deposit credited incorrectly by the bank ($5,000 - $500 = $4,500) to get a new subtotal of -$300 (still overdraft).
- Subtract the dishonoured cheque of $3,200 to get a new subtotal of -$3,500 (still overdraft).
- Subtract the bank service charge of $60 to get a final adjusted bank balance of $18,540.

The Following Information Is Needed to Reconcile the Cash Balance