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10 March, 12:05

Rich Company's unadjusted book balance at October 31, 2014 is $2,550. The following information is available for the bank reconciliation. Outstanding checks, $600 Deposits in transit, $450 Bank service charges, $90 Bank collected an accounts receivable for Rich Company, $1,000 NSF check written by one of Rich's customers, $600 Based on this information Rich's true cash balance is:

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  1. 10 March, 12:38
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    The correct answer is $2,860.

    Explanation:

    According to the scenario, the given data are as follows:

    Unadjusted book balance = $2,550

    outstanding checks = $600

    Deposit in Transit = $450

    Bank service charges = $90

    Bank collected account receivable = $1000

    . Check written by Rich's customer = $600

    So, true cash balance can be calculated as follows:

    Cash balance = $2,550 + $ 1000 - $90 - $600

    = $2,860

    Hence, the correct answer is $2,860.
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