The cash account in the general ledger of XYZ Company shows a balance of $18,700

Question

The cash account in the general ledger of XYZ Company shows a balance of $18,700 at June 30, 2004.
The June 30 bank statement; however, shows a balance of $19,800. The only reconciling items
consist of:

• NSF check from customer
• Outstanding checks totaling $5,630
• Error in recording check #970 written by XYZ Company to pay for utilities; the check was written
for $588 but was recorded in XYZ Company's accounting records as having been written for $468
• A bank service charge totaling $50
• A deposit in transit in the amount of $2,380


Calculate the amount of the NSF check.

Explanation / Answer

BAl 18700 19800
outstanding -5630
checks
Balance 18700 14170
fee -50
Balance 18650 14170
error -120
Balance 18530 14170
Deposit +2380
Balance 18530 16550
18530
-16550u sub
1980 amount of NSF check

you subtract outstanding checks from bank balance and add in the depoist in transit. From XYZs books you subtract the fee and the 120 (588-468) error. this makes XYXs balance 18530 and the bank balance 16550. if you subtract these you get 1980 - teh amount of the NSF check.

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