The accountant for Fazzi Corp.was preparing a bank reconciliation as of April 30,2017.The following items were identified: ?
$$\begin{array} { l r }
\text { Fazzi's book balance } & \$ 46,200 \
\text { Outstanding checks } & 1,100 \
\text { Interest earned on checking account } & 50 \
\text { Customer's NSF check returned by the bank } & 500
\end{array}$$ In addition,Fazzi incorrectly recorded a customer's check in cash receipts as $150;the bank recorded the amount correctly as $510.What amount will Fazzi report as its adjusted cash balance at April 30,2017?

Question

The accountant for Fazzi Corp.was preparing a bank reconciliation as of April 30,2017.The following items were identified: ?
$$\begin{array} { l r } 
\text { Fazzi's book balance } & \$ 46,200 \
\text { Outstanding checks } & 1,100 \
\text { Interest earned on checking account } & 50 \
\text { Customer's NSF check returned by the bank } & 500
\end{array}$$ In addition,Fazzi incorrectly recorded a customer's check in cash receipts as $150;the bank recorded the amount correctly as $510.What amount will Fazzi report as its adjusted cash balance at April 30,2017?

Quizplus · Accepted Answer

Starting cash balance per bank statement: $43,900
Add: Deposits in transit: $4,200
Less: Outstanding checks: $500
Adjusted balance per bank statement: $47,600

Starting cash balance per books: $44,080
Add: Interest earned: $70
Less: NSF check: $600
Adjusted balance per books: $43,550

Adjustments:
Add: Bank collection of $7,500 note receivable: $7,500
Less: Bank service charge: $80
Add: Correct customer's check amount: $360 ($510 - $150)

Adjusted cash balance: $46,110 ($43,550 + $7,500 - $80 + $360)

The Accountant for Fazzi Corp In Addition,Fazzi Incorrectly Recorded a Customer's Check in Cash Receipts