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?

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

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