Hunter's, Inc. reported a balance of $141 in its cash account at the end of the month. There were $120 of deposits in transit and $115 of checks outstanding. The bank statement showed a balance of $151, service charges of $7, and the collection of a note plus interest. The note had a face value of $17. How much interest did the bank collect for the company?

Question

Quizplus · Accepted Answer

The bank statement balance of $151 includes the collection of a note plus interest. The note's face value is $17, so the interest collected is $151 - $17 - $141 (adjusted cash balance) = $5.