Question

At March 31, Cummins Company had a balance in its cash account of $10,700. At the end of March, the company determined that it had outstanding checks of $1,160, deposits in transit of $720, a bank service charge of $40, and an NSF check from a customer for $220. The true cash balance at March 31 is?

A) 10260

B) 10440

C)10700

D)9940

Part 2

The April 30 bank statement for Trimble Corporation shows an ending balance of $40,262. The unadjusted cash account balance was $33,750. The accountant for Trimble gathered the following information:

• There was a deposit in transit for $5,356.
• The bank statement reports a service charge of $174.
• A credit memo included in the bank statement shows interest earned of $815.
• Outstanding checks totaled $13,797.
• The bank statement included a $2,570 NSF check deposited in April.

What is the true cash balance as of April 30?

A)29251

B)31821

C)36362

D)37177

Answer 1

Part-1

Answer:

The true cash balance at March 31 = $ 10,440

Working notes for the above answer is as under

balance in its cash account		10700
Less:
Bank service charge	40
NSF check	220
		-260
The true cash balance at March 31		10440

_________________________________________________________

Part-2

Answer:

The true cash balance at April 30 = 31,821

Working notes for the above answer is as under

Unadjusted bank balance	40262
Add
Deposits	5356
Less:
Outstanding checks	-13797
true cash balance as of April 30	31821