BG Inc. reports a cash book balance of $375,250 at the end of January 20x6 prior to reconciliation. The accountant for the company performs a bank reconciliation to determine what adjustments were necessary to correct the book balance of cash.

• The bank reported service fees of $310.
• The bank returned a NSF customer check deposited by BG Inc. for $2,500.
• The bank disclosed that BG Inc.s account at earned $685 of interest during the month.
• The bank mistakenly recorded a check that BG Inc. wrote to pay off an outstanding account with one of its suppliers for $6,700 rather than the true amount of $7,600.
• There were $32,520 of outstanding checks at the end of the month.
• There were $28,750 of deposits in transit as of the end of the month.

A. Use this information to find the true cash balance to be reported in BG Inc.s cash ledger by the end of the month.

B. Provide the journal entry required by BG Inc. to correct the cash balance to its true balance.

C. Determine the balance of the checking account that would have been reported by the bank per the end of month statement.

D. Assume that BG wrote $329,000 in checks and made $450,000 of deposits during the month of January. Further assume that outstanding checks at the beginning of the month had been $28,000 and deposits in-transit had been $35,500 at that time. Determine the beginning of the month balance of BG Inc.s checking account per the bank.

Hint: For part D, Create a table that tracks how checks outstanding and deposits in-transit rolled forward over the month (roll forward is an accounting term for how a particular account/item progresses over a period). Youd have a column for each type (checks/depo, then a row for the beginning of the month, a row disclosing what the bank cleared, a row disclosing what the books recorded and then the end of the month.