Rainey Company's true cash balance at October 31,2016 is $5,710.The following information is available for the bank reconciliation:
Outstanding checks,$600
Deposits in transit,$450
Bank service charges,$90
The bank had collected an account receivable for Rainey Company,$1,000
The bank statement included an NSF check written by one of Ramsey's customers for $600.
Based on this information Rainey's unadjusted book balance at October 31 is:

Question

Quizplus · Accepted Answer

The unadjusted book balance can be calculated as follows:

True cash balance: $5,710
Outstanding checks: $600
Deposits in transit: $450
Adjusted balance per bank statement: ($5,710 + $450) - $600 = $5,560

Adding back the NSF check and subtracting the bank service charges:

Adjusted balance per bank statement: $5,560
NSF check: $600
Bank service charges: $90
Adjusted balance per books: ($5,560 + $600) - $90 = $6,070

Therefore, Rainey's unadjusted book balance at October 31 is $5,400.

Rainey Company's True Cash Balance at October 31,2016 Is $5,710