Rich Company's unadjusted book balance at October 31,2012 is $2,550.The following information is available for the bank reconciliation. Outstanding checks,$600
Deposits in transit,$450
Bank service charges,$90
Bank collected an accounts receivable for Rich Company,$1,000
NSF check written by one of Rich's customers,$600.
Based on this information Rich's true cash balance is:

Question

Quizplus · Accepted Answer

Starting with the unadjusted book balance of $2,550:
- Deduct outstanding checks of $600: $2,550 - $600 = $1,950
- Add deposits in transit of $450: $1,950 + $450 = $2,400
- Add the accounts receivable collected by the bank of $1,000: $2,400 + $1,000 = $3,400
- Deduct the bank service charges of $90: $3,400 - $90 = $3,310
- Deduct the NSF check of $600: $3,310 - $600 = $2,710
Therefore, the true cash balance for Rich Company is $2,710. The correct answer is option D.

Rich Company's Unadjusted Book Balance at October 31,2012 Is $2,550