Easton Co. deposits all cash receipts on the day they are received and makes all

Question

Easton Co. deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on June 30, its Cash account shows a debit balance of $72,709. Easton's June bank statement shows $68,349 on deposit in the bank. Determine the adjusted cash balance using the following information: Deposit in transit $7,550 Outstanding checks $3,175 Check printing fee, not yet recorded by company $40 Interest earned on account, not yet recorded by the company $55 The adjusted cash balance should be:

Explanation / Answer

Solution:

Balance as per bank statement on june 30.........68349

Add: Deposit in transit......................................7550

subtotal...........................................................75899

Less: outstanding checks.................................3175

Adjusted cash balance as per bank statement....72724

Balance as per accounting records on june 30.....72709

Less: check printing fee.......................................40

Add: interest earned.............................................55

Adjusted cash balance as per accounting records...72724

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