Anonymous
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.

Questions:

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

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

1 Answer

Relevance
  • 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
    • Commenter avatarLogin to reply the answers
Still have questions? Get your answers by asking now.