Owen Company's unadjusted book balance at June 30,2016 is $9,700.The company's bank statement reveals bank service charges of $45.Two credit memos are included in the bank statement: one for $900,which represents a collection that the bank made for Owen,and one for $50,which represents the amount of interest that Owen had earned on its interest-bearing account in June.Based on this information,Owen's true cash balance is:
A)$9,700.
B)$10,695.
C)$10,550.
D)$10,605.

Question

Quizplus · Accepted Answer

The unadjusted book balance is $9,700.

The two credit memos need to be added to the book balance, so:

$9,700 + $900 + $50 = $10,550

The bank service charges need to be subtracted from the adjusted total, so:

$10,550 - $45 = $10,605

Therefore, the true cash balance for Owen is $10,605. The correct choice is D.

Owen Company's Unadjusted Book Balance at June 30,2016 Is $9,700