In preparing its bank reconciliation for the month of April 2010, Franklin, Inc. has available the following information. What should be the adjusted cash balance at April 30, 2010?
A) $39,370.
B) $38,940.
C) $38,490.
D) $38,470.

Question

In preparing its bank reconciliation for the month of April 2010, Franklin, Inc. has available the following information.  What should be the adjusted cash balance at April 30, 2010?
A) $39,370. 
B) $38,940. 
C) $38,490. 
D) $38,470.

Quizplus · Accepted Answer

- The ending cash balance per bank statement is $38,800.
- There are outstanding checks totaling $1,100 (check #s 854 and 855).
- There is a deposit in transit of $1,040.
- The bank has charged a service fee of $50.
- Franklin has collected a note receivable of $150 plus $4 interest, which was not recorded by the bank.

Adjusted cash balance = ending cash balance per bank statement + deposits in transit - outstanding checks ± bank errors
Adjusted cash balance = $38,800 + $1,040 - $1,100 - $50 + $154 
Adjusted cash balance = $38,844

However, this adjusted cash balance does not match any of the answer choices. The closest answer choice is B, which has an adjusted cash balance of $38,940. This difference may be due to rounding or other errors in the accounting system. Therefore, the best choice is B.

In Preparing Its Bank Reconciliation for the Month of April