The bank statement reported an ending balance of $43,860 after
deducting $660 in service charges and an addition of $13,500 for a
note collected by the bank on the Cherokee Company's behalf. The
company books reported an ending balance of $29,070, and determined
that deposits in transit equal $16,800 and outstanding checks equal
$18,750.
What is the adjusted cash balance?
Select one:
A. $21,120
B. $41,910
C. $16,800
D. $35,910
Lakeside Company is holding a $18,000, 90-day, 6% note receivable, dated December 1, 2019. The journal entry to record accrued interest at the end of its fiscal year on December 31, 2019 will include a:
Select one:
A. Credit note receivable for $18,000
B. Credit interest income for $270
C. Debit to interest receivable for $90
D. Debit cash for $18,270
company books ending balance | $ 29,070 |
Less: Service charges | $ (660) |
Add: note collected by the bank | $ 13,500 |
adjusted cash balance | $ 41,910 |
Answer is B. $41,910.
2. Interest will accrued only for 30 days.
Note value | $ 18,000 |
Interest rate | 6% |
Number of days accrued (Dec 1 to Dec 31) | 30 |
Interest accrued ($18,000*6%*90/360) | $ 90 |
Journal entry
Debit interest receivable | $ 90 | |
Credit interest revenue | $ 90 |
ANswer is C. Debit to interest receivable for $90
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