Ryan Company deposits all cash receipts on the day they are received and makes all cash
payments by check. Ryan’s June bank statement shows $19,361 on deposit in the bank. Ryan’s
comparison of the bank statement to its cash account revealed the following: Deposit in transit $1,650
Outstanding checks
$891. Additionally, a $35 check written and recorded by the company correctly was recorded by the
bank as a $53 deduction.
The adjusted cash balance per the bank records should be:

Adjusted in Cash balance per the bank record

bank balance                                                       $19,361

Add: Deposit intransit                                            1,650

                                                                              21,011

Outstanding check                                                  (891)

Adjusted cash balance                                       20,120

Explanation:

In order to calculate the adjusted cash balance in the bank record the deposit in transit will be added to the bank balance on the statement while the outstanding check will be deducted. Bank error shall be corrected in cash book side of the reconciliation.

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