The following information is needed to reconcile the cash balance for Discount Dry Cleaning, Inc.
• A deposit of $5,600 is in transit.
• Outstanding checks total $1,300.
• The book balance is $6,300 at February 28, 2019.
• The bookkeeper recorded a $1,600 check as $17,400 in payment of the current month's rent.
• The bank balance at February 28, 2019 was $17,930.
• A deposit of $400 was credited by the bank for $4,000.
• A customer's check for $3,400 was returned for nonsufficient funds.
• The bank service charge is $70.
What was the adjusted book balance?

Question

The following information is needed to reconcile the cash balance for Discount Dry Cleaning, Inc. 
• A deposit of $5,600 is in transit.
• Outstanding checks total $1,300.
• The book balance is $6,300 at February 28, 2019.
• The bookkeeper recorded a $1,600 check as $17,400 in payment of the current month's rent.
• The bank balance at February 28, 2019 was $17,930.
• A deposit of $400 was credited by the bank for $4,000.
• A customer's check for $3,400 was returned for nonsufficient funds.
• The bank service charge is $70.
What was the adjusted book balance?

Quizplus · Accepted Answer

Starting book balance = $6,300
Add deposit in transit = $5,600
Subtract outstanding checks = $1,300
Adjusted book balance = $10,600

However, there are some adjustments that need to be made:
Subtract recorded check error = $15,800 ($17,400 - $1,600)
Add deposit credited by bank = $4,000
Subtract returned check = $3,400
Subtract bank service charge = $70

Adjusted book balance = $10,730 - $15,800 + $4,000 - $3,400 - $70 = $18,630

The Following Information Is Needed to Reconcile the Cash Balance