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18 August, 00:17

The bank statement for Tetra Company contained the following items: a bank service charge of $80; a credit memo for interest earned, $85; and a $190 NSF check from a customer. The company had outstanding checks of $450 and a deposit in transit of $1,000. Assuming that the unadjusted bank balance was $2,000, what is the unadjusted book balance?

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  1. 18 August, 01:43
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    adjus. Bal book cash balance: $ 2,735

    Explanation:

    we do reconciliation on the bank balance:

    BANK

    Balance 2,000

    Outstanding Check - 450

    Deposit in transit 1,000

    Adjusted Balance 2,550

    Now we reverse from the adjusted balance to get the unadjusted cash balance:

    adjusted 2,550

    Service Charge + 80 * 1

    interest - 85 * 2

    NSF + 190 * 1

    adjus. Bal 2,735

    *1 (in the reconciliation they decrease the unadjusted balance so, we reverse to positive)

    *2 in the reconciliation the interest increase the unadjusted balance, the reverse will be a negavite impact.
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