The Woodrum, Dunn & Cline, Inc. bank statement, received from First Falcon Bank,

ID: 2546416 • Letter: T

Question

reported a bank balance of $20,100 at the end of June. An internal analysis

of this statement, and the companies’ accounting records, revealed the following:

- Determined that two deposits were “in transit”: $1,500 (in total)

- Bank debit memo for service charge: $16.50 (found on the bank statement)

- Determined that four outstanding checks existed: $750 (in total)

- Bank credit memo for interest earned: $20.00 (found on the bank statement)

After considering only proper reconciling items, the “true” bank cash balance at the end of June would be:

a. $20,100.00

b. $20,850.00

c. $21,570.00

d. $22,373.50

e. $22,370.00

Calculate true bank balance :

so answer is b) $20,850.00

Bank balance 20100 Add: Deposit in transit 1500 Less: Outstanding checks (750) Adjusted bank balance 20850

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