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Duke Company's unadjusted bank balance at March 31 is $2,300. The bank reconciliation revealed outstanding checks amounting to $500 and deposits in transit of $400. Based on this information, Duke's true cash balance is:________.
A. $2,400.
B. $2,000.
C. $2,200.
D. $2,700.

Respuesta :

Duke's true cash balance is $2,200

Explanation:

True cash balance is computed as follows:

  • True cash balance = Bank balance + Deposits in transit - Outstanding checks

Duke's true cash balance is computed as follows:

  • Duke Company's unadjusted bank balance at March 31 = $2,300
  • Deposits in transit = $400
  • Outstanding checks amounting to $500
  • True cash balance = $2,300 + $400 - $500
  • True cash balance = $2,200

So, Duke's true cash balance = $2,200

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