In Preparing Its Bank Reconciliation for the Month of April

question 76

Multiple Choice

In preparing its bank reconciliation for the month of April 2011, Gantner, Inc.has available the following information. $\begin{array}{lr}\text { Balance per bank statement, } 4 / 30 / 11 & \$ 78,280 \\\text { NSF check returned with } 4 / 30 / 11 \text { bank statement } & 900 \\\text { Deposits in transit, } 4 / 30 / 11 & 10,000 \\\text { Outstanding checks, } 4 / 30 / 11 & 10,400 \\\text { Bank service charges for April } & 40\end{array}$ What should be the adjusted cash balance at April 30, 2011?

• A)$78,740.
• B)$77,880.
• C)$76,980.
• D)$76,940.

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Definitions:

Miller-Orr Model

Describes a cash management strategy aiming to maintain an optimal cash balance through upper and lower cash limit controls.

Opportunity Rate

The return rate a company foregoes by investing in a certain project, often compared to the risk-free rate or another investment option.

Monthly Cash Flows

The net amount of cash and cash-equivalents being transferred into and out of a business in a given month.