Taylor Corp.identified the following data in preparing a bank reconciliation on October 31,2017. ??
$$\begin{array} { l r }
\text { Bank statement balance } & \$ 29,600 \
\text { Taylor's book balance (before adjustments) } & ? \
\text { Outstanding checks } & 3,100 \
\text { NSF check } & 300 \
\text { Serwice charge } & 200 \
\text { Deposits in transit } & 2,200 \
\text { Interest earned on checking account } & 100
\end{array}$$ What is the net amount of the adjustments to Taylor's cash balance as a result of the bank reconciliation?
A)No amounts need to be recorded.
B)$400 increase
C)$400 decrease
D)$900 decrease

Question

Taylor Corp.identified the following data in preparing a bank reconciliation on October 31,2017. ??
$$\begin{array} { l r } 
\text { Bank statement balance } & \$ 29,600 \
\text { Taylor's book balance (before adjustments) } & ? \
\text { Outstanding checks } & 3,100 \
\text { NSF check } & 300 \
\text { Serwice charge } & 200 \
\text { Deposits in transit } & 2,200 \
\text { Interest earned on checking account } & 100
\end{array}$$ What is the net amount of the adjustments to Taylor's cash balance as a result of the bank reconciliation?
A)No amounts need to be recorded.
B)$400 increase
C)$400 decrease
D)$900 decrease

Quizplus · Accepted Answer

According to the data provided in the bank reconciliation, the balance per bank statement is $11,500, and the balance per company records is $11,900. There are two adjustments to be made:
1. Outstanding checks: The total amount of outstanding checks is $1,200. This amount needs to be subtracted from the balance per company records, as these checks have not yet cleared the bank.
2. Deposits in transit: The total amount of deposits in transit is $800. This amount needs to be added to the balance per company records, as these deposits have not yet been credited by the bank.
Therefore, the adjusted balance per company records is $11,900 - $1,200 + $800 = $11,500, which is the same as the balance per bank statement. The total amount of adjustment to the cash balance is a decrease of $400, as outstanding checks need to be subtracted from the balance per company records. Hence, the correct answer is C.

Taylor Corp What Is the Net Amount of the Adjustments to Taylor's