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12 September, 02:47

A company's Cash account shows an ending balance of $ 4 comma 200. Reconciling items included a bookkeeper error of $ 75 (a $ 525 check recorded as $ 600 ), two outstanding checks totaling $ 830 , a service charge of $ 25 , a deposit in transit of $ 280 , and interest revenue of $ 30. What is the adjusted book balance?

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  1. 12 September, 04:00
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    The correct answer to this question is $4280.

    Explanation:

    Formula for adjusted book balance -

    Ending balance + Book keeping error - Service charge + Interest revenue

    Given information -

    Ending balance - $4200

    Book keeping error - $75 ($600 - $525)

    Outstanding checks - $800

    Service charge - $25

    Interest revenue - $30

    Deposit in transit - $280

    Note - There will be no treatment of deposit in transit and outstanding checks for taking out the adjusted book balance.

    Adjusted book balance -

    $4200 + $75 - $25 + $30

    = $4280
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