A comparison of the balance in Cottonwood Company\'s cash account (per its books

Question

A comparison of the balance in Cottonwood Company's cash account (per its books) as of April 30, 2009, and the bank statement dated April 30, 2009, revealed the following information:

Prepare a bank reconciliation then determine the correct cash balance.
  

Itam Ending Cash Account balance per books (unadjusted) 5520 Ending balance per bank statement 5170 Customers NSF Check returned by bank Shown on thepril bank statement 300 Outstanding checks at the end of april 870 Deposit in transit at the end of April 1100 Error made by Cottonwoon in recording a check paid to a supplier during April-- $550 was credited to Cash account when the proper amount was $500; the back properly recorded the check $500 50 when it cleared Bank service charge for April 20 Inetrest paid by Bank 150

Explanation / Answer

Balance per books 5520 Add: Interest 150 Book recording error 50 Less: NSF Check 300 Bank service charge 20 Adjusted cash balance 5,400

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