Question

Jane Company had an unadjusted book balance of $900. There were $200 of accounts receivable collections and a $100 NSF check. The bank erroneously charged Jane a $100 service charge. Based on this information, the Jane's true cash balance is ______.

Answer 1

Jane's true cash balance is calculated by adjusting the unadjusted book balance with the accounts receivable collections and subtracting both the NSF check and the erroneous bank service charge, resulting in a true cash balance of $900.

Step-by-step explanation:

To calculate Jane's true cash balance, we need to adjust Jane Company's unadjusted book balance taking into account the accounts receivable collections, the NSF (Non-Sufficient Funds) check, and the erroneous bank service charge. Starting with an unadjusted book balance of $900 and adding the $200 of accounts receivable collections, we get a subtotal of $1100. Then, we need to subtract both the NSF check and the erroneous service charge, which total $200 ($100 each). With these adjustments, the true cash balance for Jane Company is $900.