Clayborn Company deposits all cash receipts on the day they are received and makes all cash payments by check. At the close of business on May 31, its Cash account shows a debit balance of $28,525. Clayborn's May bank statement shows $25,000 on deposit in the bank. Determine the adjusted cash balance using the following information: Deposit in transit $ 8,650 Outstanding checks $ 6,900 Bank service fees, not yet recorded by company $ 140 A NSF check from a customer, not yet recorded by the company $ 1,635 The adjusted cash balance should be:

$26,750

Explanation:

The computation of the adjusted cash balance is shown below;

= Debit balance in the cash account - bank service fees - NSF check from a customer

= $28,525 - $140 - $1,635

= $26,750

The other items would be relevant to the bank balance and therefore it should not be considered in the given case

Hence, the adjusted cash balance is $26,750

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the correct answer is:

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