Adjusted cash balances?

Leng Xiong is unable to reconcile the bank balance at January 31. Leng’s reconciliation

is shown here.

Instructions

(a) What is the proper adjusted cash balance per bank?

(b) What is the proper adjusted cash balance per books?

(c) Prepare the adjusting journal entries necessary to determine the adjusted cash balance

per books.

Cash balance per bank $3,660.20

Add: NSF check 370.00

Less: Bank service charge 25.00

Adjusted balance per bank $4,005.20

Cash balance per books $3,975.20

Less: Deposits in transit 590.00

Add: Outstanding checks 670.00

Adjusted balance per books $4,055.20

1 Answer

  • (a) What is the proper adjusted cash balance per bank?

    Cash balance per bank $3,660.20

    Add: Deposits in transit 590.00

    Less: Outstanding checks 670.00

    adjusted cash balance per bank $3,580.20

    (b) What is the proper adjusted cash balance per books?

    Cash balance per books $3,975.20

    Less: NSF check 370.00

    Less: Bank service charge 25.00

    adjusted cash balance per books $3,580.20

    (c) Prepare the adjusting journal entries necessary to determine the adjusted cash balance per books

    Dr AR 370

    Cr Cash 370

    Dr Bank charges 25

    Cr Cash 25

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