6. The Cash account of Safe and Secure Security Systems reported a balance of $2

Question

6. The Cash account of Safe and Secure Security Systems reported a balance of $2,490 at May 31, 2011. There were outstanding checks totaling $500 and a May 31 deposit in transit of $300. The bank statement, which came from Tri Cities Bank, listed the May 31 balance of $3,360. Included in the bank balance was a collection of $680 on account from Ryan Saar, a Safe and Secure customer who pays the bank directly. The bank statement also shows a $20 service charge and $10 of interest revenue that Safe and Secure earned on its bank balance.

Explanation / Answer

Bank balance as per cash book = 2490

Adjustments:-

Add:- Collection from Ryan Saar = 680

Less:- Service charge = (20)

Add:- Interest received = 10

Adjusted balance as per cash book = 3160

Balance as per bank statement = 3360

Adjustments:-

Add:- Deposits in transit = 300

Less:- Outstanding cheques = (500)

Adjusted balance as per bank statement = 3160

Adjusted balance as per cash book = Adjusted balance as per bank statement = 3160

Bank balance as per cash book = 2490

Adjustments:-

Add:- Collection from Ryan Saar = 680

Less:- Service charge = (20)

Add:- Interest received = 10

Adjusted balance as per cash book = 3160

Balance as per bank statement = 3360

Adjustments:-

Add:- Deposits in transit = 300

Less:- Outstanding cheques = (500)

Adjusted balance as per bank statement = 3160

Adjusted balance as per cash book = Adjusted balance as per bank statement = 3160

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