Question

On May 31, Money Corporation's Cash account showed a balance of $13,500 before the bank reconciliation was prepared. After examining the May bank statement and items included with it, the company's accountant found the following items: Checks outstanding $ 3,050 Deposits outstanding 2,900 Non-sufficient funds check 170 Service fees 95 Error: Money Corporation wrote a check for $95 but recorded it incorrectly for $950. What is the amount of cash that should be reported in the company's balance sheet as of May 31

Answer 1

The amount of cash that should be reported in the company's balance sheet as of May 31 is $2,975.

What is a balance sheet?

• A balance sheet also referred to as a statement of financial position or a statement of financial condition in financial accounting, is a summary of the financial standing of a person or an organization, including a corporation, private limited company, sole proprietorship, business partnership, government agency, or not-for-profit organization.
• As of a particular date, such as the conclusion of its financial year, assets, liabilities, and ownership equity are listed. It's common to refer to a balance sheet as a "picture of a company's financial status."
• The balance sheet is the only one of the four fundamental financial statements that only apply at one particular period in a company's fiscal year.

Solution -

Deposits outstanding = $3,050 (+)

actual amount on check my Money corporation = $95 (+)

Service fees = $170 (-)

∴ $3050+95-170=2975$

So, the amount of cash that should be reported in the company's balance sheet as of May 31 is $2,975.

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