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Calculate the correct balance of cash at the end of March?
Brangelina Adoption Agency's general ledger shows a cash balance of $4,771. The balance of cash in the March-end bank statement is $7,350. The bank statement reveals the following information: checks outstanding of $2,650, bank service fees of $95, and interest earned of $24.
I need to calculate the correct balance of cash at the end of March?
I got $4629 but it is wrong
1 Answer
- JJLv 57 years agoFavorite Answer
The cash on the ledge at the end of the month would be adjusted down by $95 (bank fees) and up by $24 (interest).
The outstanding checks would be added to the cash balance to reconcile the bank's books with the ledger.
The calculation above gives you a cash balance of $4700. This would be the month end ledger balance. To reconcile with the bank, you would add (not an entry, but just ensuring no other differences are known) the $2650 to see that the bank books minus the outstanding checks match the ledger.