E7-6 Tasha Orin is unable to reconcile the bank balance at January 31. Tasha’s reconciliation is shown here.Cash balance per bank $3,677.20Add: NSF check 450.00Less: Bank service charge 28.00Adjusted balance per bank $4,099.20Cash balance per books $3,975.20Less: Deposits in transit 590.00Add: Outstanding checks 770.00Adjusted balance per books $4,155.20

Instructions(a) What is the proper adjusted cash balance per bank?(b) What is the proper adjusted cash balance per books?(c) Prepare the adjusting journal entries necessary to determine the adjusted cash balance per books.

a.

Cash balance for bank $3,677.2Add: Deposits in transit $ 590

$4,267.2Less: Outstanding checks $ 770Adjusted cash balance per bank $3,497.2

b.

Cash balance for books $3,975.2Less: NSF checks $ 450 Bank service charge $ 28Adjusted cash balance for bank $3,497.2

c.

Debit CreditAccounts Receivable Cash

450450

Miscellaneous Expense Cash

2828