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 $13,162. Franklin's August bank statement shows $14,237 on deposit in the bank. Determine the adjusted cash balance using the following information: Deposit in transit | $ 4,500 Outstanding checks | $ 3,900 Bank service fees, not yet recorded by company | $ 50 The bank collected on a note receivable, not yet recorded by the company | $ 1,725 The adjusted cash balance should be:A) $18, 737 B) $10, 337 C) $14, 887 D) $13, 112 E) $14, 837

Answer 1

Answer:

E) $14,837

Explanation:

The computation of the adjusted cash balance is shown below:

= Cash account debit balance - bank service fees + collected amount on a note receivable

= $13,162 -$50 + $1,725

= $14,837

All other information is related to the adjusted bank balance. So, we do nit consider it for calculation of the adjusted cash balance