Question

Rune Co.’s checkbook balance on December 31 was $10,000. On that date, Rune held the following items in its safe: $4,000 check payable to Rune, postdated January 3, and not included in the December 31 checkbook balance, in collection of a sale made in December. $1,000 check payable to Rune, deposited December 15 and included in the December 31 checkbook balance, but returned by the bank on December 30 stamped "NSF." The check was redeposited on January 2, and cleared on January 9. What amount should Rune report as cash in its December 31 balance sheet?

Answer 1

Rune Co. should report $11,000 as cash in its December 31 balance sheet, which is calculated by adding the checkbook balance and the returned check that cleared on January 9.

Step-by-step explanation:

Rune Co. should report $11,000 as cash in its December 31 balance sheet.

The items held in its safe include a $4,000 check payable to Rune, postdated for January 3. Since the date is after December 31, it is not included in the checkbook balance for that date.

Additionally, a $1,000 check payable to Rune was deposited on December 15 and included in the December 31 checkbook balance.

However, it was returned by the bank on December 30 stamped "NSF." The check was redeposited on January 2 and cleared on January 9.

Therefore, the cash balance on December 31 should be calculated as follows: $10,000 (checkbook balance) + $4,000 (postdated check that will be included in January) + $1,000 (returned check that cleared on January 9) = $15,000; but since the postdated check is not included in the December 31 balance, the answer is $10,000 + $1,000 = $11,000.

Answer 2

$13,000

Step-by-step explanation:

Rune Co.'s

As of December 31

Balance as per Bank Statement $10,000

(+) Bank credits and collections $4,000

(-) Bank errors overstate book balance $1,000

Correct Cash Balance $13,000