Flynn Company\'s monthly bank statement showed the ending balance of cash of $19

ID: 2539508 • Letter: F

Question

Flynn Company's monthly bank statement showed the ending balance of cash of $19,400. The bank reconciliation for the period showed an adjustment for a deposit in transit of $1,950, outstanding checks of $2,900, a NSF check of $1,600, bank service charges of $75 and the EFT from a customer in payment of the customer's account of $2,400.

Use the information above to answer the following question. What is the up-to-date ending Cash balance?

$20,350

$18,450

$22,375

$17,725

What was the cash balance on the company's books (before the adjustments for items on the bank reconciliation)?

$17,725

$22,375

$20,350

$18,450

Explanation / Answer

1) Use the information above to answer the following question. What is the up-to-date ending Cash balance?

Solution: $18,450

Working: 19,400 + 1950 - 2,900 = 18,450

2) What was the cash balance on the company's books (before the adjustments for items on the bank reconciliation)?

Solution: 17,725

Working:

Cash balance per books.

17725 (balance)

Less: Bank service charge

-75

Add: Direct payment by customer

2400

Less: NSF Checks

-1600

Adjusted cash balance per books

18450