[Anonymous]

Phillip Co’s monthly bank statement shows a balance of $54,200. Reconciliation of the statement with the company books reveals the following information.

Bank service charge 10

Insufficient funds check 650

Outstanding checks 1500

Deposits in transit 350

Check deposited by Phillip and cleared by the bank for 125, but improperly recorded by Phillip as 152.

What is the net cash balance per books after reconciliation?

A. 52,363

B. 53,023

C. 53,050

D. 53,077

Answer, C. 53,050

Bank balance 54,200

Outstanding checks (1500)

Deposit in transit 350

---

53,050

Why is 27 not included in the reconciliation for books? It should be 125 but was recorded as 152 in the books, so there should be a reduction of 27 per books, which would make the answer B, 53,023, instead of C. Am I right?

[Anonymous]

those are already reflected on a bank statement

I mean assuming 27 was adjusted, the book balance should be 53050

[Missy]

No. Because you're starting, with the bank balance which already includes the 27 decrease. If you were starting with the book balance you would have to account for the difference.

Old timer,  A71'er since 2010.

Finance manager/HR manager

 

 

Licensed Massachusetts Non Reporting CPA since 2012
Finance/Admin/HR Manager

[Anonymous]

Oh, gotcha.

[Author]

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