Question

Ryan company deposits all cash receipts on the day they are received and makes all cash payments by check. Ryan's June bank statement shows a $27,861 balance in the bank. Ryan's comparison of the bank statement to its cash account revealed the following: deposit in transit $3,350, outstanding checks $1,350. Additionally, a $46 check written and recorded by the company was incorrectly recorded by the bank as a $64 deduction. The adjusted cash balance per the bank records should be ________.

Answer 1

The adjusted cash balance per the bank records is $29,879, calculated by adding the deposit in transit, deducting the outstanding checks, and correcting the bank error for the misrecorded check.

Step-by-step explanation:

The student is asking how to adjust the cash balance per the bank records. To begin, the bank statement shows a balance of $27,861. From this, we add the deposit in transit of $3,350 because this amount has not been reflected in the bank's records yet. Next, we need to deduct the total amount of outstanding checks, which is $1,350, as these are checks written by the company that have not yet been cashed or cleared by the bank. Lastly, we correct the bank error regarding the check amount: the bank deducted $64 instead of the correct amount of $46. Therefore, we need to add back the difference of $18 ($64 - $46).

The adjusted cash balance per the bank records would then be calculated as follows:

• Starting balance: $27,861
• Add deposit in transit: +$3,350
• Subtract outstanding checks: -$1,350
• Add correction for bank error: +$18

The sum of these amounts gives us the adjusted cash balance per the bank records: $27,861 + $3,350 - $1,350 + $18 = $29,879.