Franklin Company deposits all cash receipts on the day they are received and makes all cash payments by check.At the close of business on August 31,its Cash account shows a debit balance of $13,162.Franklin's August bank statement shows $14,237 on deposit in the bank.Determine the adjusted cash balance using the following information:
$$\begin{array} { | l | r | }
\hline \text { Deposit in transit } & \$ 4,500 \
\hline \text { Outstanding checks } & \$ 3,900 \
\hline \text { Bank service fees, not yet recorded by company } & \$ 50 \
\hline \text { The bank collected on a note receivable, not yet recorded by the company } & \$ 1,725 \
\hline
\end{array}$$
The adjusted cash balance should be:

Question

Franklin Company deposits all cash receipts on the day they are received and makes all cash payments by check.At the close of business on August 31,its Cash account shows a debit balance of $13,162.Franklin's August bank statement shows $14,237 on deposit in the bank.Determine the adjusted cash balance using the following information:
$$\begin{array} { | l | r | } 
\hline \text { Deposit in transit } & \$ 4,500 \
\hline \text { Outstanding checks } & \$ 3,900 \
\hline \text { Bank service fees, not yet recorded by company } & \$ 50 \
\hline \text { The bank collected on a note receivable, not yet recorded by the company } & \$ 1,725 \
\hline
\end{array}$$
The adjusted cash balance should be:

Quizplus · Accepted Answer

The adjusted cash balance is calculated by starting with the bank statement balance, adding deposits in transit, subtracting outstanding checks, and adjusting for any other items (bank service fees and note receivable collections). Starting with $14,237 (bank statement balance), add $4,500 (deposits in transit), subtract $3,900 (outstanding checks), subtract $50 (bank service fees), and add $1,725 (note receivable collection) results in an adjusted cash balance of $14,837.

Franklin Company Deposits All Cash Receipts on the Day They