On october 31, 2018, damon company's general ledger shows a checking account balance of $8,409. the company's cash receipts for the month total $74,400, of which $71,315 has been deposited in the bank. in addition, the company has written checks for $72,479, of which $71,054 has been processed by the bank.

Corrected Account Balance ... $6,749

Explanation:

On october 31, 2018, damon company's general ledger shows a checking account balance of $8,409. the company's cash receipts for the month total $74,400, of which $71,315 has been deposited in the bank. in addition, the company has written checks for $72,479, of which $71,054 has been processed by the bank.

Therefore the correct account balance will be

Balance as per Checking Account ... 8,409

Add: Unprocessed checks ... 1,425

Less; outstanding deposits ... (3,085)

Corrected Account Balance ... $6,749

Note that:

Unprocessed checks is derived by ($72,479 less $71,054)

Outstanding deposits is derived by ($74,400 less $71,315)

balance per books = $12,059

Explanation:

to adjust the bank account:

balance per books = checking account balance ($8,409) - deposits in transit ($74,400 - $71,315 = $3,085) + outstanding checks ($72,479 - $71,054 = $1,425) - bank fees ($160) + note collected by bank ($5,100) + interest earned ($370)

balance per books = $8,409 - $3,085 + $1,425 - $160 + $5,100 + $370 = $12,059