The following information was taken from a company's bank reconciliation at the end of the year: Bank balance $ 8,000 Checks outstanding $ 5,800 Note collected by the bank $ 1,500 Service fee $ 20 Deposits outstanding $ 4,000 NSF check $ 300 What is the correct cash balance that should be reported in the company's balance sheet at the end of the year?

Question

Business

Lucia Travis

19 May, 09:17

The following information was taken from a company's bank reconciliation at the end of the year: Bank balance $ 8,000 Checks outstanding $ 5,800 Note collected by the bank $ 1,500 Service fee $ 20 Deposits outstanding $ 4,000 NSF check $ 300 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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Emmanuel Ramsey · Answer 1

The correct cash balance that should be reported is $6,200

Explanation:

In this question, we are asked to calculate the correct cash balance that is to be reported in a company's balance sheet at the end of the year.

To do this, we employ the use of a mathematical formula.

Mathematically, cash balance = Bank balance + Outstanding deposits - Outstanding checks

From the question, we can identify the following;

Cash Balance = ?

Bank Balance = $8,000

Outstanding deposits = $4,000

Outstanding checks = $5,800

Imputing these values into the equation, we have;

Cash balance = 8,000 + 4,000 - 5,800 = $6,200