Question

The Cash account in the ledger of Hensley, Inc. showed a balance of $3,100 at June 30. The bank statement, however, showed a balance of $3,900 at the same date. The only reconciling items consisted of a $700 deposit in transit, a bank service charge of $7, and a large number of outstanding checks. What is the "adjusted cash balance" at June 30?

Answer 1

The adjusted cash balance at June 30 can be calculated by adding the deposit in transit, deducting the bank service charge, and deducting the outstanding checks.

Step-by-step explanation:

The adjusted cash balance at June 30 can be calculated by adjusting the Cash account balance in the ledger to reconcile it with the bank statement balance.

1. A $700 deposit in transit should be added to the Cash account balance, as it represents a deposit made by Hensley, Inc. that has not been recorded by the bank yet.
2. The $7 bank service charge should be deducted from the Cash account balance, as it represents a fee charged by the bank.
3. Outstanding checks should also be deducted from the Cash account balance, as they represent checks issued by Hensley, Inc. that have not yet been cleared by the bank.

By applying these adjustments, we can calculate the adjusted cash balance at June 30.

Answer 2

$3,093

Step-by-step explanation:

Hensley, Inc.

Bank Reconciliation Statement

Month Ended June 30

Balance as Hensley, Inc. record $3,100

Less: Service Charges $7

Adjusted Cash Balance $3,093

Cash Balance as per Bank Statement $3,900

Add: Deposit in Transit $700

Less: Outstanding checks* $1,507

Adjusted Cash Balance $3,093

*Outstanding Checks = Balance as per Bank Statement + Deposit in Transit - Adjusted Cash Balance

Outstanding Checks = $3,900 + $700 - $3,093

Outstanding Checks = $1,507