The following information was available to the accountant of Midland Company when preparing the monthly bank reconciliation: $$\begin{array} { | l | r | }
\hline \text { Outstanding cheques: } & \begin{array} { r }
\# 643 \text { for } \$ 502 \
\# 651 \text { for } \$ 43
\end{array} \
\hline \text { Bank service charges } & \$ 25 \
\hline \text { Deposits in transit } & \$ 190 \
\hline \text { Customer note receivable collected by bank } & \$500\
\hline \text { Cash balance per bank statement } & \$ 975 \
\hline \text { Cash balance per books (prior to reconciliation) } & \$ 145\
\hline
\end{array}$$ What is the corrected cash balance per books following completion of the reconciliation?
A) $120.
B) $430.
C) $620.
D) $645.

Question

The following information was available to the accountant of Midland Company when preparing the monthly bank reconciliation: $$\begin{array} { | l | r | } 
\hline \text { Outstanding cheques: } & \begin{array} { r } 
\# 643 \text { for } \$ 502 \
\# 651 \text { for } \$ 43
\end{array} \
\hline \text { Bank service charges } & \$ 25 \
\hline \text { Deposits in transit } & \$ 190 \
\hline \text { Customer note receivable collected by bank } & \$500\
\hline \text { Cash balance per bank statement } & \$ 975  \
\hline \text { Cash balance per books (prior to reconciliation) } & \$ 145\
\hline
\end{array}$$ What is the corrected cash balance per books following completion of the reconciliation?
A) $120.
B) $430.
C) $620.
D) $645.

Quizplus · Accepted Answer

The corrected cash balance per books is calculated by adjusting the book balance for bank service charges and the note receivable collected by the bank: $145 (initial book balance) - $25 (bank service charges) + $500 (note receivable) = $620.

The Following Information Was Available to the Accountant of Midland