The bank statement for Tetra Company contained the following items: a bank service charge of $80; a credit memo for interest earned, $85; and a $190 NSF check from a customer. The company had outstanding checks of $450 and a deposit in transit of $1,000. Assuming that the unadjusted bank balance was $2,000, what is the unadjusted book balance?

adjus. Bal   book cash balance:   $ 2,735

Explanation:

we do reconciliation on the bank balance:

BANK

Balance                       2,000

Outstanding Check  -450

Deposit in transit         1,000  

Adjusted Balance        2,550

Now we reverse from the adjusted balance to get the unadjusted cash balance:

adjusted              2,550

Service Charge+80    *1

interest                  -85    *2

NSF                +190    *1

adjus. Bal              2,735

*1 ( in the reconciliation they decrease the unadjusted balance so, we reverse to positive)

*2 in the reconciliation the interest increase the unadjusted balance, the reverse will be a negavite impact.

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