Question

scenario 7: precision engineering llc

the bookkeeper for precision engineering is reviewing the following notes for the august 31 reconciliation:
the final balance on the bank statement is $9,870.
the companys cash t - account has an ending balance of $8,735.
a deposit of $900 was mailed to the bank on the last day of the month and does not appear on the statement.
the bank statement shows a credit memo for a note it collected on the companys behalf: $750 for the principal and $25 in interest.
a check from a customer, m. davis, was returned for non - sufficient funds for $180.
the bookkeeper discovered an error: check #210 for utilities was correctly written for $450, but she had accidentally recorded it in the ledger as $540.
a comparison of cashed checks to the journal showed that checks totaling $1,350 are still uncleared.

Explanation:

Step1: Adjust bank statement balance

Add the outstanding deposit and subtract the uncleared checks.
$9870 + 900-1350$
$=9420$

Step2: Adjust company's cash - account balance

Add the note collection (principal and interest) and correct the error in check recording, subtract the NSF check.
$8735+(750 + 25)+(540 - 450)-180$
$=8735 + 775+90 - 180$
$=9420$

Answer:

The adjusted balance for both the bank statement and the company's cash - account is $9420$.