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4 August, 06:21

The following information was taken from a company’s bank reconciliation at the end of the year:

Bank balance - $8,100

Checks outstanding - $8,400

Note collected by the bank - $1,500

Service fee - $35

Deposits outstanding - $4,100

NSF check - $310

What is the correct cash balance that should be reported in the company's balance sheet at the end of the year?

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  1. 4 August, 09:51
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    The correct cash balance that should be reported in the company's balance sheet at the end of the year is $3,800

    Explanation:

    The computation of the correct cash balance is shown below:

    = Bank balance + Deposits outstanding - Checks outstanding

    = $8,100 + $4,100 - $8,400

    = $3,800

    The other items which are given in the question are related to the bank balance. So, we do not consider it in the computation part. It already adjusted to the bank balance. Hence, we ignored it.
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