C213 The bank statement reported an ending balance of $58,480 after deducting $880 in serv, Thesis of Business Accounting

Download C213 The bank statement reported an ending balance of $58,480 after deducting $880 in serv and more Thesis Business Accounting in PDF only on Docsity! C213 The bank statement reported an ending balance of $58,480 after deducting $880 in service charges and an addition of $18,000 for a note collected by the bank on the Cherokee Company's behalf. The company books reported an ending balance of $38,760, and determined that deposits in transit equal $22,400 and outstanding checks equal $25,000. What is the adjusted cash balance? Adjusted Cash Balance Calculation To calculate the adjusted cash balance, we need to reconcile the bank statement with the company's books. This involves adjusting the reported balances by accounting for any outstanding items that have not yet been recorded by both the bank and the company. Bank Statement Balance The bank statement balance is given as $58,480. We need to consider any additional items that have not been reflected in this balance:  Service charges: These have already been deducted from the bank balance.  Note collected: The bank has added $18,000 for a note collected on the company's behalf. Company Books Balance The company's books show an ending balance of $38,760. We need to adjust this balance for:  Deposits in transit: $22,400 that the company has recorded but the bank has not yet processed.  Outstanding checks: $25,000 that the company has issued but have not yet been cleared by the bank. Reconciliation Let's reconcile the two balances: Adjustments to Bank Statement Balance Description Amount Adjustment Ending Balance $58,480 - Service Charges ($880) Already deducted Note Collected $18,000 Already added Adjusted Bank Balance: $58,480 (No further adjustments needed as the service charges and note collected are already reflected in the ending balance) Adjustments to Company Books Balance