Question

BANK			BOOKS
Bal, Jan 31	$1,070		Bal, Jan 31
Add:			Add:
Deposit in transit	650		Bank collection	440
			Interest revenue	15
Less:			Less:
Outstanding checks			Service charge	(110)
Adjusted bank balance	$1,250		Adjusted book balance	$1,250

Answer 1

Bank		Book
Bal. jan 31	1,070	Bal, jan 31	905
Add :		Add :
Deposit in transit	650	Bank collection	440
		Interest revenue	15
Less :		Less :
Outstanding checks	(470)	Service charge	(110)
Adjusted bank balance	$1,250	Adjusted book balance	$1,250

Adjusted bank balance = Bank balance, jan 31 + Deposit in transit - Outstanding checks

1,250 = 1,070 + 650 - Outstanding checks

Outstanding checks = $470

Adjusted book balance = Book balance, jan 31 + Bank collection + Interest revenue - Service charge

1,250 = Book balance, jan 31 + 440 + 15 - 110

Book balance, jan 31 = 1,250 - 440 - 15 + 110

= $905

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