Question

A company received a bank statement with a balance of $6,100. Reconciling items included a bookkeeper error of $400—a $400 check recorded as $ 500

—two outstanding checks totaling $810​, a service charge of $25​, a deposit in transit of $260​, and interest revenue of $20. What is the adjusted bank​ balance?

Answer 1

The adjusted bank balance is $4,435.

Step-by-step explanation:

To determine the adjusted bank balance, we need to take into account the reconciling items provided in the question. Let's go through each item:

1. Bookkeeper error of $400: This means that the company recorded a $400 check as $500. Therefore, we need to deduct $100 from the bank balance.
2. Two outstanding checks totaling $810: These are checks that have been issued by the company but have not yet cleared the bank. We subtract the total amount of outstanding checks from the bank balance, so we deduct $810 from the balance.
3. A service charge of $25: This is a charge imposed by the bank for the services provided. We deduct $25 from the bank balance.
4. Deposit in transit of $260: This is a deposit made by the company that has not yet been credited by the bank. We add $260 to the bank balance.
5. Interest revenue of $20: This is revenue earned by the company from interest on its bank account. We add $20 to the bank balance.

Now, let's calculate the adjusted bank balance:

• Bank balance: $6,100
• Deduct bookkeeper error: $100
• Deduct outstanding checks: $810
• Deduct service charge: $25
• Add deposit in transit: $260
• Add interest revenue: $20

Adjusted bank balance = ($6,100 - $100 - $810 - $25) + $260 + $20 = $4,435