The set of items below was identified in preparing a bank reconciliation for Mars Corp.as of August 31,2017. ?
$$\begin{array} { l r }
\text { Bank statement balance } & \$ 19,500 \
\text { Mars's book balance (before adjustments) } & ? \
\text { Outstanding checks } & 2,700 \
\text { Customer's NSF check } & 350 \
\text { Service charges } & 100 \
\text { Deposit in transit } & 1,000 \
\text { Interest earned on checking account } & 60
\end{array}$$ Mars Corp.'s balance per books before the reconciliation is
A)$17,410.
B)$17,900.
C)$18,190.
D)$18,310.

Question

The set of items below was identified in preparing a bank reconciliation for Mars Corp.as of August 31,2017. ?
$$\begin{array} { l r } 
\text { Bank statement balance } & \$ 19,500 \
\text { Mars's book balance (before adjustments) } & ? \
\text { Outstanding checks } & 2,700 \
\text { Customer's NSF check } & 350 \
\text { Service charges } & 100 \
\text { Deposit in transit } & 1,000 \
\text { Interest earned on checking account } & 60
\end{array}$$ Mars Corp.'s balance per books before the reconciliation is
A)$17,410.
B)$17,900.
C)$18,190.
D)$18,310.

Quizplus · Accepted Answer

To find Mars Corp.'s book balance before adjustments, adjust the bank statement balance for outstanding checks and deposits in transit: $19,500 - $2,700 + $1,000 = $17,800$. Then adjust for NSF check, service charges, and interest earned: $17,800 - $350 - $100 + $60 = $17,410$. Therefore, the correct book balance before adjustments is $18,190.

The Set of Items Below Was Identified in Preparing a Bank