Question

From the information given below, calculate the adjusted balance in the company section. cash balance according to the bank statement $5,600 cash balance according to the company's records 4,480 deposit in transit 950 outstanding checks 1,250 note receivable of $800 plus interest of $20 collected by bank, but not recorded by the company as indicated by a credit memo 820

Answer 1

To determine the adjusted cash balance for the company's section, start with the company's recorded cash balance ($4,480), add the deposit in transit ($950), subtract outstanding checks ($1,250), and add the note receivable and interest collected by the bank ($820), resulting in an adjusted balance of $5,000.

Step-by-step explanation:

To calculate the adjusted cash balance for the company's books, we need to make several adjustments to the cash balance according to the company's records, incorporating the effects of the deposit in transit, outstanding checks, and the note receivable collected by the bank.

• Start with the company's recorded cash balance: $4,480
• Add the deposit in transit: $4,480 + $950 = $5,430
• Subtract outstanding checks: $5,430 - $1,250 = $4,180
• Add the note receivable and interest collected by the bank (not yet recorded by the company): $4,180 + $820 = $5,000

Therefore, the adjusted balance in the company's books should be $5,000.