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The Cash account in the ledger of Hensley,Inc.showed a balance of $3,100 at June 30.The bank statement,however,showed a balance of $3,900 at the same date.The only reconciling items consisted of a $700 deposit in transit,a bank service charge of $7,and a large number of outstanding checks.
-What is the "adjusted cash balance" at June 30?
A)$3,900.
B)$3,093.
C)$7,600.
D)$2,400.

Question

Quizplus · Accepted Answer

To find the adjusted cash balance, we need to add the deposit in transit to the book balance and subtract any outstanding checks and bank service charge from the bank balance.

Adjusted Cash Balance = Book Balance + Deposit in Transit - Outstanding Checks - Bank Service Charge

Adjusted Cash Balance = $3,100 + $700 - Outstanding Checks - $7

We don't have the exact amount of outstanding checks, but we know it is a large number. Therefore, we can estimate it to be around $700, which is the same amount as the deposit in transit.

Adjusted Cash Balance = $3,100 + $700 - $700 - $7
Adjusted Cash Balance = $3,093

Therefore, the answer is B) $3,093.

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