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Linetech Company’s bank statement showed an ending balance of $8,000. Items appearing in the bank reconciliation included: outstanding checks, $500; deposits in transit, $1,000; bank service charges, $50; and Driver Company’s $250 check erroneously deducted from Linetech’s bank account by the bank. How much is the correct cash balance at the end of the month?
A. $10,600.
B. $8,750.
C. $8,500.
D. $8,250.

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Answer:

D. $8,250

Explanation:

Calculation for how How much is the correct cash balance at the end of the month

Using this formula

Correct cash balance= Bank balance - Outstanding checks + Deposits in transit (}+ Bank error

Let plug in the formula

Correct cash balance =$8,000 - $500 +$1,000 + $250

Correct cash balance=$8,250

Therefore the correct cash balance at the end of the month will be $8,250

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