Sally Rice is unable to reconcile the bank balance at January 31. Sally’s reconc

Question

Sally Rice is unable to reconcile the bank balance at January 31. Sally’s reconciliation is shown here.

28

$4,099.20

770

$4,155.20

Cash balance per bank $3,677.20 Add: NSF check 450 Less: Bank service charge

28

Adjusted balance per bank

$4,099.20

Cash balance per books $3,975.20 Less: Deposits in transit 590 Add: Outstanding checks

770

Adjusted balance per books

$4,155.20

(a) What is the proper adjusted cash balance per bank? The proper adjusted cash balance per bank (b) What is the proptedcsh balance per books? The proper adjusted cash balance per books

Explanation / Answer

PARTICULARS

AMOUNT

Cash balance as per bank

3,677.2

Add: Deposit in Transit

590

Less: Outstanding checks

(770)

Adjusted Balance as per Bank

3497.2

PARTICULARS

AMOUNT

Cash balance as per books

3,975.2

Less: NSF check

(450)

Less: Bank Service Charge

(28)

Adjusted Balance as per Books

3,497.2

2. Proper adjusted cash balance as per books is $ 3,497.2

Journal Entries

DATE

ACCOUNT TITLES & EXPLANATION

DEBIT

CREDIT

Jan 31

Accounts Payable

450

     To Cash

450

(To record NSF check)

Jan 31

Bank Service Charges

28

     To Cash

28

(To record bank service charge)

PARTICULARS

AMOUNT

Cash balance as per bank

3,677.2

Add: Deposit in Transit

590

Less: Outstanding checks

(770)

Adjusted Balance as per Bank

3497.2

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