As of May 31, 2014, the bank statement showed an ending balance of $17,470. The

Question

As of May 31, 2014, the bank statement showed an ending balance of $17,470. The unadjusted Cash account balance was $16,360. The following information is available: 1. Deposit in transit, $2,265. 2. Credit memo in bank statement for interest earned in May, $20. 3. Outstanding check, $3,368. 4. Debit memo for service charge, $13. Required Determine the true cash balance by preparing a bank reconciliation as of May 31, 2014, using the preceding information. Bank Reconciliation May 31, 2014 Unadjusted bank balance, May 31, 2014 $17,470 Add: Deposit in transit $2,265 Outstanding check 2,265 19,735 Less: Outstanding check 0 True cash balance, May 31, 2014 $19,735 Unadjusted book balance, May 31, 2014 Add: Credit memo for interest earned 0 Less: 0 Debit memo for service charge 0 True cash balance, May 31, 2014 $0

Explanation / Answer

Bank Reconciliation May 31, 2014 Unadjusted bank balance, May 31, 2014 $17,470.00 Unadjusted book balance, May 31, 2014 $16,360.00 Add: Deposit in transit $2,265.00 Add: Credit memo for interest earned $20.00 Less : Outstanding check $3,368.00 Less : Debit memo for service charge $13.00 True cash balance, May 31, 2014 $16,367.00 True cash balance, May 31, 2014 $16,367.00

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