Question

Before reconciling its bank statement, Lauren Cosmetics Corporation's general ledger had a month-end balance in the cash account of $8,250. The bank reconciliation for the month contained the following items:Deposits in transit $870Outstanding checks 645Interest earned 20NSF check returned to bank 220Bank service charge 70Given the above information, what up-to-date ending cash balance should Lauren report at month-end?A. $7,380.B. $8,530.C. $7,980.D. $7,700.

Answer 1

a. $7,380

Step-by-step explanation:

Ending cash balance = Cash balance + Interest earned - NSF check returned to bank - Bank service charge

Ending cash balance = $8,250 + $20 - $220 - $70

Ending cash balance = $7,980

So, $7,380 is the up-to-date ending cash balance should Lauren report at month-end.