Question

Clayborn Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on May 31, its Cash account shows a debit balance of $24,525. Clayborn's May bank statement shows $21,800 on deposit in the bank. Determine the adjusted cash balance using the following information: Deposit in transit $ 7,450 Outstanding checks $ 6,100 Bank service fees, not yet recorded by company $ 100 A NSF check from a customer, not yet recorded by the company $ 1,275 The adjusted cash balance should be:

Answer 1

Answer:

Clayborn Company

The adjusted cash account balance (debit) should be:

$23,150

Explanation:

a) Data and Calculations:

Cash account balance (debit) $24,525

Bank Statement balance $21,800

Reconciliation issues:

Deposit in transit $ 7,450

Outstanding checks $ 6,100

Bank service fees, not yet recorded by company $ 100

A NSF check from a customer, not yet recorded by the company $ 1,275

b) Adjusted Cash balance:

Cash account balance (debit)  $24,525

NSF check                                     (1,275)

Bank service fees                           (100)

Adjusted cash balance (debit) $23,150

c) Adjusted Bank Statement balance:

Bank Statement balance   $21,800

Deposit in transit                   7,450

Outstanding checks             (6,100)

Adjusted bank statement $23,150