Question

Alton Co. had a cash balance of $32,300 recorded in its general ledger at the end of the month, prior to receiving its bank statement. Reconciliation of the bank statement reveals the following information:

Bank service charge: $15
Check deposited and returned for insufficient funds check: $120
Deposit recorded in the general ledger as $258 but should be $285
Checks outstanding: $1,800

After reconciling its bank statement, what amount should Alton report as its cash account balance?

A. $30,392 B. $30,338 C. $32,138 D. $32,192

Answer 1

D. $32,192

Step-by-step explanation:

The computation of the corrected cash account balance is given below:

= Cash balance - bank service charges - Check deposited and returned for insufficient funds + bank error

= $32,300 - $15 - $120 + $27

= $32,192

The bank error is

= $285 - $258

= $27

The other adjustment are related to the bank balance so it would not be taken for the computation part