Ask Question
20 March, 01:22

Hector Company gathered the following reconciling information in preparing its March bank reconciliation:

Cash balance per books, on 3/31 $12,000

Note receivable collected by bank 6,000

Outstanding checks 9,000

Deposits in transit 4,500

Bank service charge 75

NSF check 1,200

Using the above information, what is the adjusted cash balance for March?

a. $16,725

b. $12,225

c. $7,500

d. $15,500

+4
Answers (1)
  1. 20 March, 05:16
    0
    b) $12,225

    Explanation:

    Note: The following transactions have not been considered.

    Balance as per books = $12,000

    Notes Receivable collected by bank shall be added as not recorded in books

    Balance = $12,000 + $6,000 = $18,000

    Outstanding checks = $9,000 which is not yet cashed therefore such balance shall be deducted = $18,000 - $9,000 = $9,000 Balance

    Deposits in transit, which means these deposits are still not added by bank made by us, therefore let us reverse and add them back then balance = $9,000 + $4,500 = $13,500

    Bank service charge has been deducted by bank but not in books such shall be deducted = $13,500 - $75 = $13,425 = Balance

    Check declared NSF not recorded shall be deducted, thus balance = $13,425 - $1,200 = $12,225

    Correct option is

    b) $12,225
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Hector Company gathered the following reconciling information in preparing its March bank reconciliation: Cash balance per books, on 3/31 ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers