Question

In the process of reconciling its bank statement for January, Maxi's Clothes accountant compiles the following information: Cash balance per company books on January 30 $ 4,725 Deposits in transit at month-end $ 1,800 Outstanding checks at month-end $ 520 Bank service charges $ 25 EFT automatically deducted monthly, not yet recorded by Maxi $ 380 An NSF check returned on a customer account $ 265.

The adjusted cash balance per the books on January 31 is
a. $5,855
b. $5,335
c. $4,055
d. $4,815

Answer 1

Option (c) is correct.

Step-by-step explanation:

Given that,

Cash balance per company books on January 30 = $4,725

Deposits in transit at month-end = $ 1,800

Outstanding checks at month-end = $ 520

Bank service charges = $ 25

EFT deduction = $380

NSF check returned on a customer account = $ 265

Adjusted cash balance as per books:

= Unadjusted book balance - Bank Service charge - EFT deduction - NSF check

= $4,725 - $25 - $380 - $265

= $4,055