Question

Franklin Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on August 31, its Cash account shows a debit balance of $20,162. Franklin's August bank statement shows $19,837 on deposit in the bank. Determine the adjusted cash balance using the following information:

Deposit in transit $ 6,600

Outstanding checks $ 5,300

Bank service fees, not yet recorded by company $ 120

The bank collected on a note receivable, not yet recorded by the company $ 1,095

The adjusted cash balance should be:

Answer 1

Preparation of bank reconciliation statement for Computation of adjusted cash balance:

Balance as per Company's records	20,162
Add: collections of Notes receivable	1,095
Deduct: bank service charges	(120)
Adjusted cash balance	21,137
Balance as per bank statement	19,837
Add: deposits in transit	6,600
Deduct: outstanding checks	(5,300)
Adjusted cash balance	21,137

Thus the adjusted cash balance should be : $ 21,137

If you are benefited from the solution then please like,if disliked then please specify the reason in the comments.