Question

Lima, Inc.’s April bank statement shows an April 30 balance of$20,480. Prior to reconciliation, its books show a cash balance of$22,040. The information below pertains to Lima, Inc.

Deposits intransit $3,200

Checksoutstanding 1,860

Bank servicecharge 40

Error in Lima’s records understating cashdisbursement 720

Check of another company charged erroneously against

Lima’s bankaccount 460

Bank statement shows bank collected a note receivable

And interest income forLima 1,000

The reconciled cash balance at april 30 on the bankreconciliation should be:

a. $24,140

b. $18,680

c. $21,820

d. $22,280