Question

Cardinal Company's bank statement showed a balance at May 31 of $180,974. The only reconciling items consisted of a large number of outstanding checks totaling $51,847.

At May 31, what balance should Cardinal's Cash account show?

a) $232,821 b) $77,280 c) $180,794 d) $129,127

Answer 1

The answer is D) 129,127

Step-by-step explanation:

Cardinal's Company bank statement has a balance of $180,974 at May 31st.

The only reconciling items are those of outstanding checks totaling $51,847.

These are checks that have been presented for payment to the bank, but have not yet cleared and been deducted from the bank balance. We therefore need to consider these checks when calculating the correct cash balance at May 31st.

Therefore the real cash balance will be 180974 - 51847 = $129127

The answer is D) 129,127

Answer 2

d) $129,127

Step-by-step explanation:

Cardinal Company's

Bank statement balance at May 31 of $180,974

Less outstanding checks totaling $51,847

Cash account balance $129,127

Therefore at May 31, Cardinal's Cash account balance show $129,127