Question

The cash account shows a balance of $85,000 before reconciliation. The bank statement does not include a deposit of $4,600 made on the last day of the month. The bank statement shows a collection by the bank of $1,880 and a customer's check for $640 was returned because it was NSF. A customer's check for $900 was recorded on the books as $1,080, and a check written for $158 was recorded as $194. The correct balance in the cash account was

Answer 1

Answer:

$86,024

Explanation:

The computation of the corrected balance in the cash account is as follows:

Unadjusted cash balance $85,000

Add: Collection by bank $1,880

Less: NSF Check -$640

Less: Error in recording customers check ($1,080 - $900) -$180

Add: Error in recording check ($194 - $158) -$36

Adjusted cash balance $86,024