The following information is needed to reconcile the cash balance for Discount Dry Cleaning, Inc. A deposit of $ 5,600 is in transit. Outstanding checks total $ 1,500. The book balance is $ 6,100 on February 28, 2019. The bookkeeper recorded a $ 1,700 check as $ 17,300 in payment of the current month's rent. The bank balance on February 28, 2019, was $ 16,210. A deposit of $ 200 was credited by the bank for $ 2, 000. A customer's check for $ 3,100 was returned for non-sufficient funds. The bank service charge is $ 90. What was the adjusted book balance?

$18,510.

Explanation:

Book Balance                                               $6,100

Adjustments:

Add: Transposition Error                             15,600

Less: NSF                                                       3,100

Bank Service Charges                                       90

Adjusted Book Balance                            $18,510

Transposition Error - Company has understated its Cash Balance by recording 17,300 instead of 1,700. So, add the error to the Account.

NSF - Company has recorded a collection of receivable. But the bank termed the Check as "NSF" because of insufficient funds. So, deduct it from the Cash balance.

Deposit in-Transit and Outstanding Checks are already recorded in the Company's books of accounts. These transactions should be adjusted in the Bank Account.

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