16 September, 00:54

# Hector Company gathered the following reconciling information in preparing its March bank reconciliation:Cash balance per books, on 3/31 \$12,000Note receivable collected by bank 6,000Outstanding checks 9,000Deposits in transit 4,500Bank service charge 75NSF check 1,200Using the above information, what is the adjusted cash balance for March?a. \$16,725b. \$12,225c. \$7,500d. \$15,500

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1. 16 September, 04:37
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b) \$12,225

Explanation:

Note: The following transactions have not been considered.

Balance as per books = \$12,000

Notes Receivable collected by bank shall be added as not recorded in books

Balance = \$12,000 + \$6,000 = \$18,000

Outstanding checks = \$9,000 which is not yet cashed therefore such balance shall be deducted = \$18,000 - \$9,000 = \$9,000 Balance

Deposits in transit, which means these deposits are still not added by bank made by us, therefore let us reverse and add them back then balance = \$9,000 + \$4,500 = \$13,500

Bank service charge has been deducted by bank but not in books such shall be deducted = \$13,500 - \$75 = \$13,425 = Balance

Check declared NSF not recorded shall be deducted, thus balance = \$13,425 - \$1,200 = \$12,225

Correct option is

b) \$12,225