Question

Rainey Company's true cash balance at October 31 is $5,710. The following information is available for the bank reconciliation:
a. Outstanding checks, $600
b. Deposits in transit, $450
c. Bank service charges, $90
d. The bank had collected an account receivable for Rainey Company, $1,000
e. The bank statement included an NSF check written by one of Ramsey's customers for $600.
What was the unadjusted book balance at October 31?

Answer 1

Answer:

$5,400

Explanation:

We are given the cash balance per books and we are told to determine the cash balance per bank. The following formula is used to calculate the cash balance per book:

cash balance per books = cash balance per bank + notes receivable collected by bank  -  bank service charge -  NSF check

$5,710 = cash balance per bank + $1,000 - $90 - $600

cash balance per bank = $5,710 + $90 + $600 - $1,000 = $5,400