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14 December, 10:13

Harry Smith has just received the monthly bank statement at September 30 from City National Bank, and the statement shows an ending balance of $545. Smith's Cash account shows a September 30 cash balance of $1,823. Listed on the statement are an EFT rent collection of $325, a service charge of $8, two NSF checks totaling $125, and a $10 charge for printed checks. In reviewing his cash records, Smith identifies outstanding checks totaling $609 and a September 30 deposit in transit of $1,790. During September, he recorded a $310 check for the salary of a part-time employee as $31. What is Harry's "true" cash balance?

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Answers (2)
  1. 14 December, 10:46
    0
    Harry's "true" cash balance = $1726

    Explanation:

    Harry Smith Bank reconciliation for 30 September is recorded as follows

    BANK:

    Balance as at September 30 ... $545

    Add: Deposit in transit ... $1790

    Total ... $2335

    Less: outstanding checks ... $609

    Total adjusted bank balance ... $1726

    BOOKS:

    Balance as at September 30 ... $1823

    Add: EFT rent Collection ... $325

    Total ... $2184

    Less:

    Service charge ... $8

    Printed check charges ... $10

    NSF checks ... $125

    Book error correction (recorded a $310 check as $31 ... $279

    Total ... $422

    Now Adjusted book balance = total in Add - total in less = $2184 - $422 = $1726

    Harry's "true" cash balance = $1726
  2. 14 December, 13:54
    0
    Smith's actual cash balance is $1,726

    Explanation:

    Harry Smith Bank reconciliation for the month of September 30th is recorded as;

    BANK:

    Balance as at September 30=.$545

    Add: Deposit in transit =.$1790

    Total = $2335

    Less: outstanding checks = $609

    Adjusted total bank balance = $1726

    BOOKS:

    Balance as at September 30 = $1823

    Add: EFT rent Collection = $325

    Total = $1823+$325

    Total = $2184

    Less

    Service charge = 8

    NSF checks = $125

    Printed check charges = $10

    Book error correction (recorded a $310 check as $31

    =$310-$31

    = $279

    Total = $422

    The value of the Adjusted book balance = total in Add - total in less

    = $2184 - $422

    $1,726
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