Designs on You
The following information relates to the company's May bank reconciliation:
$\begin{array}{llr}
\text { Bank statement balance} &\$5,000\
\text { Unadjusted cash balance according to company records } &?\
\text { Deposit in transit } &1,000\
\text { Outstanding cheques} &500\
\text { Bank service charges } &50\
\text { Interest earned on the bank account } &10\
\text { Customer's NSF cheque returned by the bank } &25\
\end{array}$
In addition, a cheque was recorded in the accounting records as $1,200 but the correct amount as recorded by the bank was only $1,000.
-Refer to the figure Designs on You.What is the unadjusted cash balance according to the company's records at May 31?

Question

Designs on You
The following information relates to the company's May bank reconciliation:
 $\begin{array}{llr}
  \text {  Bank statement balance} &\$5,000\
 \text { Unadjusted cash balance according to company records } &?\
 \text { Deposit in transit } &1,000\
 \text {  Outstanding cheques} &500\
 \text { Bank service charges } &50\
 \text { Interest earned on the bank account } &10\
 \text { Customer's NSF cheque returned by the bank } &25\
\end{array}$
 In addition, a cheque was recorded in the accounting records as $1,200 but the correct amount as recorded by the bank was only $1,000.
-Refer to the figure Designs on You.What is the unadjusted cash balance according to the company's records at May 31?

Quizplus · Accepted Answer

The unadjusted cash balance is calculated by adjusting the bank statement balance for deposits in transit and outstanding checks, and then adjusting for errors and other items. Starting with the bank balance of $5,000, add the deposit in transit of $1,000, subtract the outstanding checks of $500, and adjust for the cheque error ($1,200 - $1,000 = $200). The unadjusted cash balance is $5,365.

Designs on You the Following Information Relates to the Company's

Designs on You
the Following Information Relates to the Company's