scenario 10: creative canvas co. an accountant for creative canvas co. is preparing the july 31 bank…

scenario 10: creative canvas co. an accountant for creative canvas co. is preparing the july 31 bank reconciliation from the following notes: the company’s cash ledger balance is $4,240. the bank statement’s ending balance is $4,550. a deposit of $500 from july 31 is not on the statement. a customer’s check was returned for nsf for $225. the monthly service charge was $25. checks #301 ($800) and #305 ($350) are outstanding. check #299 for a vendor payment of $430 was recorded in the company journal as $340. what is the business adjusted balance?

scenario 10: creative canvas co. an accountant for creative canvas co. is preparing the july 31 bank reconciliation from the following notes: the company’s cash ledger balance is $4,240. the bank statement’s ending balance is $4,550. a deposit of $500 from july 31 is not on the statement. a customer’s check was returned for nsf for $225. the monthly service charge was $25. checks #301 ($800) and #305 ($350) are outstanding. check #299 for a vendor payment of $430 was recorded in the company journal as $340. what is the business adjusted balance?

Answer

Explanation:

Step1: Adjust cash - ledger balance

The cash - ledger balance is adjusted for NSF check, service charge and journal entry error. The NSF check of $225 and service charge of $25 are deductions from the cash - ledger balance, and the under - recording of check #299 ($430 - $340=$90) is also a deduction. $4240-225 - 25-90$ $=4240-(225 + 25+90)$ $=4240 - 340$ $=3900$

Step2: Adjust bank - statement balance

The bank - statement balance is adjusted for the outstanding checks and the deposit in transit. The deposit in transit of $500 is added and the outstanding checks ($800 + 350=$1150) are deducted. $4550+500-1150$ $=5050 - 1150$ $=3900$

Answer:

$3900$