Anonymous asked in Business & FinanceOther - Business & Finance · 9 years ago

Accounting Solution Needed?

On May 31, Maloney Inc. had a cash balance per books of $ 6,744. The bank statement from Community Bank on that date showed a balance of $7,650. A comparison of the bank statement with the company's Cash account revealed the following:

The bank statement included a bank service charge of $48.

The bank statement included two electronic collections from customers on account: $2,065 received from C. Dicerni and $39 received from R. Doyle. These were not previously recorded.

Cash sales of $836 on May 12 were deposited in the bank. The journal entry and the deposit slip were incorrectly made out and recorded by Maloney for $856. The bank detected the error and credited Maloney for the correct amount.

Outstanding cheques at April 30 totalled $1,510. Of these, $1,120 cleared the bank in May. There were $946 of cheques written in May that were still outstanding on May 31.

On May 18, the company issued cheque #1181 for $685 to a creditor in payment of its account. The cheque, which cleared the bank in May, was incorrectly journalized and posted by Maloney as being for $568.

Included with the cancelled cheques was a cheque issued by Baloney Inc. for $660 that was incorrectly charged to Maloney by the bank.

On May 31, the bank statement showed a returned (NSF) cheque of $681 issued by a customer in payment of its account. In addition, the bank charged a $40 processing fee for this transaction.

The May 31 deposit of $968 was not included in the deposits on the May bank statement. The deposit had been placed in the bank's night deposit vault on May 31.


What is the adjusted cash balance per bank on May 31?

What is the adjusted cash balance per books on May 31?

1 Answer

  • Marc
    Lv 7
    9 years ago
    Favorite Answer

    Original Balance Per Bank $7,650

    Less Outstanding Checks $1,336 ($1,510 - $1,120 + $946)

    Add Baloney Check Deducted in Error $660

    Add Deposit in Transit $968

    Adjusted cash balance per bank on May 31 $7,942

    Original Balance Per Book $6,744

    Less Bank Service Charge $48

    Less Error in May 12 Deposit $20 ($856 - $836)

    Add Electronically Collected Deposits $2,104 ($2,065 + $39)

    Less Error on Check #1181 $117 ($685 - $568)

    Less NSF Check Returned $681

    Less NSF Fee $40

    Adjusted cash balance per books on May 31 $7,942

    Source(s): 35 years of accounting experience
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