Osborn Company's unadjusted book balance at June 30,2012 is $7,800.The company's bank statement reveals bank service charges of $45.Two credit memos are included in the bank statement: one for $900 which represents a collection of an account receivable that the bank made for Osborn and one for $10 which represents the amount of interest that Osborn had earned on its interest-bearing checking account in June.Based on this information,Osborn's true cash balance is:

Question

Quizplus · Accepted Answer

The unadjusted book balance is $7,800.
The bank statement shows:
- Bank service charges: $45
- Credit memo for collection of AR: $900
- Credit memo for interest earned: $10

To find the true cash balance, we need to make adjustments to the unadjusted book balance:
- Subtract bank service charges: $7,800 - $45 = $7,755
- Add credit memo for collection of AR: $7,755 + $900 = $8,655
- Add credit memo for interest earned: $8,655 + $10 = $8,665

Therefore, the true cash balance is $8,665.

Osborn Company's Unadjusted Book Balance at June 30,2012 Is $7,800