Question

17.You are to prepare the bank reconciliation of Tree Company at March 31, using the following supplementary information: (a.) Deposit in transit at March 31, $4,880 (b.) The following checks were issued by Tree in payment of utilities but these checks had not been cleared by the bank as of March 31: no. 120, $140; no. 121, $932; no. 127, $307; no. 134, $1,200. (c.) Service charge by bank, $50. (d.) A note receivable for $4,050 left by Tree Company with bank for collection that had been collected and credited to company's account. No interest involved. (e.) A check for $70 drawn by a customer, but deducted from Tree 's account by the bank and returned with the notation "NSF." (f.) Tree 's check no. 480, issued in payment of $980 worth of office equipment, correctly written in the amount of $980 but erroneously recorded in Tree's accounting records as $890. (g.)At March 31, the balance of the Cash account according to the records of Tree Company was $5,261. (h.)The March 31 bank statement showed a balance of ?. What is unadjusted balance per bank statement at March 31?(3 Points)

$6,908

some other amount

$6,800

$7,088

Answer 1

Answer:

Determination of unadjusted balance per bank statement on March 31:

Particulars		Amount
Balance as per cash account records		$5,261
Deposit in transit		($4,880)
In respect of cheque issued but not cleared by the bank:
Cheque No. 120	$140
Cheque No. 121	$932
Cheque No. 127	$307
Cheque No. 134	$1,200	$2,579
Service charges levied by the bank		($50)
Collection of the note receivable by the bank		$4,050
Cheque return with the notation "NSF"		($70)
Erroneously recording of office equipment		($90)
Balance as per bank statement		$6,800

Therefore, Option (c) i.e. $6,800 is the correct answer.