scenario 9: redwood consulting\nthe following information has been collected for redwood consultings may…
scenario 9: redwood consulting\nthe following information has been collected for redwood consultings may bank reconciliation:\nbalance according to the may bank statement: $7,050.\nbalance according to the internal company ledger: $5,900.\na deposit for $1,234 was incorrectly recorded in the books as $1,324.\nthe bank collected a $400 payment from a client and charged a $15 fee for the service.\nthe account earned $5 in interest during may.\ncheck #550 for $850 has not been cashed yet.\nwhat is the business adjusted book balance?\nyour answer
Answer
Explanation:
Step1: Correct the deposit error
The deposit was over - recorded by $1324 - 1234=90$. So we subtract this over - recording from the initial ledger balance. The adjusted balance after this step is $5900-90 = 5810$.
Step2: Account for bank - collected payment
The bank collected a $400$ payment from a client, so we add this amount to the balance. The balance becomes $5810 + 400=6210$.
Step3: Account for bank service fee
The bank charged a $15$ service fee, so we subtract this from the balance. The balance is $6210-15 = 6195$.
Step4: Account for interest earned
The account earned $5$ in interest, so we add this to the balance. The final adjusted book balance is $6195 + 5=6200$.
Answer:
$6200$