Question

Franklin Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on August 31, its Cash account shows a debit balance of $16,662. Franklin's August bank statement shows $17,037 on deposit in the bank. Determine the adjusted cash balance using the following information: Deposit in transit $ 5,550 Outstanding checks $ 4,600 Bank service fees, not yet recorded by company $ 85 The bank collected on a note receivable, not yet recorded by the company $ 1,410 The adjusted cash balance should be: Multiple Choice $17,987 $12,437. $18,072 $22,587

Answer 1

$17,987

Step-by-step explanation:

The computation of the adjusted cash balance is shown below:

= Balance in deposit in bank + Deposit in transit - Outstanding checks

= $17,037 + $5,550 - $4,600

= $17,987

We simply added the deposits and deduct the outstanding checks from the balance in deposit in the bank so that the correct amount could arrive