A Company's Records Indicate the Balance in Its Checking Account

Essay

A company's records indicate the balance in its checking account at the end of the month is $3,918. Comparing the company's records with the monthly bank statement reveals several additional cash transactions, such as deposits in transit of $4,022, three outstanding checks totaling $497, a $30 bank service charge, a $1,000 note receivable collected by the bank plus interest earned of $35, and an NSF check for $150. Determine the company's adjusted cash balance and prepare the journal entries necessary to adjust the account balance.