Question

The bank statement reported an ending balance of $43,860 after deducting $660 in service charges and an addition of $13,500 for a note collected by the bank on the Cherokee Company's behalf. The company books reported an ending balance of $29,070, and determined that deposits in transit equal $16,800 and outstanding checks equal $18,750.
What is the adjusted cash balance?
Select one:
A. $21,120
B. $41,910
C. $16,800
D. $35,910
Lakeside Company is holding a $18,000, 90-day, 6% note receivable, dated December 1, 2019. The journal entry to record accrued interest at the end of its fiscal year on December 31, 2019 will include a:
Select one:
A. Credit note receivable for $18,000
B. Credit interest income for $270
C. Debit to interest receivable for $90
D. Debit cash for $18,270

Answer 1

Answer:

Question 1

B. $41,910

Question 2

C. Debit to interest receivable for $90

Explanation:

Question 1

Calculation for the adjusted cash balance

Using this formula

Adjusted cash balance = Cash balance per books +Deposits in transit - Outstanding checks

Let plug in the formula

Adjusted cash balance= $43,860+$16,800-$18,750

Adjusted cash balance= $41,910

Therefore Adjusted cash balance is $41,910

Question 2

Based on the information given The Appropriate journal entry to record accrued interest at the end of its fiscal year on December 31, 2019 will include a:

Debit to interest receivable for $90 which is calculated as:

Interest receivable=[(6%*$18,000*90days/360)/3]

Interest receivable=$270/3

Interest receivable=$90