Question

The balance shown in the August bank statement of Colt Company was $22,400. After examining the August bank statement and items included with it, the company's accountant found:

Checks outstanding $4,500
NSF check 140
Note collected by bank for the Colt Company 1,500
Deposits outstanding 2,300
Bank service fees 60

What is the amount of cash that should be reported in the balance sheet as of August 31?
A.$20,200
B.$16,700
C.$23,400
D.$15,700

Answer 1

the amount of cash that should be reported in balance sheet is $20200

option A is correct

Step-by-step explanation:

given data

balance shown = $22400

Checks outstanding = $4,500

NSF = 140

Note collected = 1500

Deposits outstanding = 2300

service fees = 60

to find out

What is the amount of cash should be reported

solution

we will find amount of that should reported as given by

amount reported = balance amount + deposit outstanding - check outstanding ..................1

put here all these value in equation 1 we get

amount reported = 22400 + 2300 - 4500

amount reported = 20200

so the amount of cash that should be reported in balance sheet is $20200

option A is correct

Answer 2

A.$20,200

Step-by-step explanation:

The computation of the cash amount which should be reported in the balance sheet is shown below:

= August Bank statement balance + Deposits outstanding - Checks outstanding

= $22,400 + $2,300 - $4,500

= $20,200

The other amount which is given in the question is irrelevant. Hence, these items should not be considered in the computation, so they are ignored.