Question

At July 31, Oriole Company has this bank information: cash balance per bank $8,085, outstanding checks $755, deposits in transit $1,390 and a bank service charge $25. Determine the adjusted cash balance per bank at July 31.

Answer 1

The adjusted cash balance per bank at July 31 is $8,720

Step-by-step explanation:

Adjusted cash balance is the cash balance calculated after required adjustments in the balance as per bank or balance as per record of the entity having that bank account.

Accroding to the bank reconciliation statement

• The outstanding checks are deducted from the cash balance as per bank because these are the check issued but not be presented in the bank until the end of a period.
• On the other hand, the deposit in transit is the cash that is to be received but this balance is in the clearing process of the check.
• Bank Service charges is already adjusted in the balance as per bank.

Adjusted Balance can be calculated as follow

Cash balance as per Bank ______________ $8,085

Less: Outstanding Checks ______________ $755

Add: Deposit in transit _________________ $1,390

Adjusted Cash balance ________________ $8,720