Question

The following information is needed to reconcile the cash balance for Discount Dry​ Cleaning, Inc. ​ A deposit of $ 5,600 is in transit. ​Outstanding checks total $ 1,500. ​The book balance is $ 6,100 on February​ 28, 2019. ​The bookkeeper recorded a $ 1,700 check as $ 17,300 in payment of the current​ month's rent. ​The bank balance on February​ 28, 2019, was $ 16,210. A deposit of $ 200 was credited by the bank for $ 2, 000. ​ A​ customer's check for $ 3,100 was returned for non-sufficient funds. ​The bank service charge is $ 90. What was the adjusted book​ balance?

Answer 1

$18,510.

Step-by-step explanation:

Book Balance $6,100

Adjustments:

Add: Transposition Error 15,600

Less: NSF 3,100

Bank Service Charges 90

Adjusted Book Balance $18,510

Transposition Error - Company has understated its Cash Balance by recording 17,300 instead of 1,700. So, add the error to the Account.

NSF - Company has recorded a collection of receivable. But the bank termed the Check as "NSF" because of insufficient funds. So, deduct it from the Cash balance.

Deposit in-Transit and Outstanding Checks are already recorded in the Company's books of accounts. These transactions should be adjusted in the Bank Account.