The following information pertains to Sooner Company's cash balance and bank reconciliation as of August 31: $$\begin{array} { | l | r | }
\hline \text { Book balance before reconciliation } & \$ 5,000 \
\hline \text { Checks outstanding } & \$ 2,500 \
\hline \text { Notes collected by the bank } & \$ 2,200 \
\hline \text { Service fee } & \$ 50 \
\hline \text { Deposits outstanding } & \$ 2,000 \
\hline
\end{array}$$ What is the correct cash balance for Sooner Company?

Question

The following information pertains to Sooner Company's cash balance and bank reconciliation as of August 31: $$\begin{array} { | l | r | } 
\hline \text { Book balance before reconciliation } & \$ 5,000 \
\hline \text { Checks outstanding } & \$ 2,500 \
\hline \text { Notes collected by the bank } & \$ 2,200 \
\hline \text { Service fee } & \$ 50 \
\hline \text { Deposits outstanding } & \$ 2,000 \
\hline
\end{array}$$ What is the correct cash balance for Sooner Company?

Quizplus · Accepted Answer

The correct cash balance is $7,150. This is calculated by adding the book balance before reconciliation ($5,000) to the deposits outstanding ($2,000) and subtracting the checks outstanding ($2,500) and the service fee ($50).

The Following Information Pertains to Sooner Company's Cash Balance and Bank