Question

Jamison Company gathered the following reconciling information in preparing its June bank reconciliation: Cash balance per bank, June 30 $11,883 Note receivable collected by bank 7,216 Outstanding checks 5,690 Deposits in transit 4,345 Bank service charge 77 NSF check 1,902 Using the above information, determine the cash balance per books (before adjustments) for Jamison Company.

On October 1, Black Company receives a 10% interest-bearing note from Reese Company to settle a $16,200 account receivable. The note is due in six months. At December 31, Black should record interest revenue of

Gunnar Company gathered the following reconciling information in preparing its September bank reconciliation. Calculate the adjusted cash balance per books on September 30.

Cash balance per books, September 30	$2,750
Deposits in transit	200
Notes receivable and interest collected by bank	630
Bank charge for check printing	50
Outstanding checks	1,250
NSF check	290

Answer 1

1) Firstly we need to calculate adjusted bank balance or adjusted book balance (both are same), then with the help of adjusted book balance (i.e. by reverse calculations) we will calculate the cash balance per books (without adjustments).

Calculation of Cash Balance per Books (Amounts in $)

Cash balance per bank, June 30		11,883
Less: Outstanding checks		5,690
Add: Deposits in transit		4,345
Adjusted bank balance		10,538
Adjusted book balance	10,538
Less: Note receivable collected by bank	7,216
Add: Bank service charge	77
Add: NSF check	1,902
Cash balance per book, June 30 (without adjustments)		5,301

Therefore the cash balance per books (before adjustments) for Jamison Company is $5,301.

2) Interest revenue on Dec 31 (from Oct 1 to Dec 31) = Note value*interest rate*Months due/12 months

= $16,200*10%*3/12 months = $405

At December 31, Black should record interest revenue of $405.

3) Calculation of Adjusted Cash balance per books (Amounts in $)

Cash balance per books, September 30		2,750
Add: Note receivable and interest collected by bank		630
		3,380
Less: Bank charge for printing	50
Less: NSF check	290	(340)
Adjusted Cash balance per books		3,040

Therefore the adjusted cash balance per books on September 30 is $3,040.