Question

In the process of reconciling its bank statement for April, Donahue Enterprises' accountant compiles the following information: Cash balance per company books on April 30 $ 6,210 Deposits in transit at month-end $ 1,430 Outstanding checks at month-end $ 750 Bank charge for printing new checks $ 110 Note receivable and interest collected by bank on Donahue’s behalf $ 640 A check paid to Donahue during the month by a customer is returned by the bank as NSF $ 610 The adjusted cash balance per the books on April 30 is:

Answer 1

Answer:

$6,130

Explanation :

The adjusted cash balance can be determined by doing the following steps

1. Prepare an updated Cash Book to update the Cash Book Balance and,
2. Prepare a Bank Reconciliation Statement to check the accuracy of the new Cash Book Balance

Step 1 : Updated Cash Book

Cash Book (Bank columns only)

Debit :

Unadjusted Balance as at April 30               $ 6,210

Credit Transfers                                               $ 640

Total                                                                $6,850

Credit:

Bank charges                                                    $ 110

Dishonored checks                                          $ 610

Adjusted Balance (Balancing figure)             $6,130

Total                                                                $6,850

Step 2 : Bank Reconciliation Statement

Bank Reconciliation Statement as at April 30

Balance as per Cash Book (updated)          $6,130

Less Outstanding Lodgements                  ($ 1,430)

Add  Unpresented Checks                            $ 750

Balance as per Bank Statement                  $5,450