Bluejay Corp. prepared a bank reconciliation as of July 31, 2009. The following items were identified:
Bluejay's bank statement balance: $14,300
Deposit in transit: 1,000
Outstanding checks: 1,300
Bank service charges: 50
Customer's NSF check returned by the bank: 150
What is Bluejay's adjusted cash balance at July 31st?
To determine Bluejay's adjusted cash balance at July 31st, we need to make a few adjustments to the bank statement balance by taking into account the deposit in transit, outstanding checks, bank service charges, and the customer's NSF check.
First, we need to add the deposit in transit to the bank statement balance. Deposit in transit refers to a deposit that has been made by Bluejay but is not yet recorded by the bank. In this case, the deposit in transit is $1,000. So, we add $1,000 to the bank statement balance:
Bank statement balance: $14,300
Deposit in transit: + $1,000
Adjusted balance: $15,300
Next, we need to deduct the outstanding checks from the adjusted balance. Outstanding checks are checks that have been issued by Bluejay but have not yet been presented to the bank for payment. In this case, the outstanding checks amount to $1,300. So, we subtract $1,300 from the adjusted balance:
Adjusted balance: $15,300
Outstanding checks: - $1,300
Adjusted balance: $14,000
Now, we need to consider the bank service charges. Bank service charges represent fees charged by the bank for maintaining the account. In this case, the bank service charges amount to $50. So, we subtract $50 from the adjusted balance:
Adjusted balance: $14,000
Bank service charges: - $50
Adjusted balance: $13,950
Finally, we need to account for the customer's NSF check returned by the bank. An NSF check is a check that bounces due to insufficient funds in the customer's account. In this case, the customer's NSF check is $150. So, we subtract $150 from the adjusted balance:
Adjusted balance: $13,950
Customer's NSF check: - $150
Adjusted cash balance: $13,800
Therefore, Bluejay's adjusted cash balance at July 31st is $13,800.