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 $23,025. Clayborn's May bank statement shows $20,600 on deposit in the bank. Determine the adjusted cash balance using the following information: Deposit in transit $ 7,000 Outstanding checks $ 5,800 Bank service fees, not yet recorded by company $ 85 A NSF check from a customer, not yet recorded by the company $ 1,140 The adjusted cash balance should be:

Answer 1

Adjusted cash balance

= Bank balance + deposits in transit - outstanding check

= $20600 + $7000 - $5800

= $21800

Or

= Book balance - service fees - NSF cheaque

= $23025 - $85 - $1140

= $21800

Hence answer is $21800

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