Worked-example setupScope and assumptions
- Linden Peak controls one US-dollar demand deposit and all listed records refer to December 31.
- The deposit and checks are valid timing items; the returned check and fee were first learned from the bank statement.
- The Treasury bill was acquired with 60 days to maturity and meets Linden Peak's documented cash-equivalent policy.
- The compensating balance is legally restricted under a short-term borrowing agreement.
- Period
- December 31
- Units
- USD
- Rounding
- Whole dollars except the effective-rate percentage, rounded to two decimal places
Facts
Linden Peak's bank statement shows $91,450 and its ledger shows $88,400. A $12,000 deposit has not posted, and $17,900 of recorded checks have not cleared. The bank returned a $2,800 customer check and charged a $50 fee. Linden Peak also holds a $25,000 Treasury bill acquired with 60 days to maturity.
A lender separately requires $50,000 of a $500,000 short-term loan to remain on deposit. The loan's stated annual rate is 6%.
Reconcile both records
| Bank side | Amount | Book side | Amount |
|---|---|---|---|
| Statement balance | $91,450 | Ledger balance | $88,400 |
| Add deposit in transit | 12,000 | Restore returned receivable | (2,800) |
| Subtract outstanding checks | (17,900) | Record bank fee | (50) |
| Adjusted balance | $85,550 | Adjusted balance | $85,550 |
Record the returned check by debiting Accounts Receivable for $2,800 and crediting Cash. Record the fee by debiting Bank Fee Expense for $50 and crediting Cash. No entry repeats the deposit or outstanding checks.
Build the reported amount
The qualifying Treasury bill joins the reconciled deposit balance. Unrestricted cash and cash equivalents are therefore $85,550 plus $25,000, or $110,550. The separate $50,000 compensating balance remains visible as restricted cash under the supplied contract facts.
Annual interest is $30,000. Usable loan proceeds are $450,000, so the simple effective rate is 6.67%. This calculation measures the burden of the supplied arrangement; it does not establish its legal enforceability.
Review controls
The bank and book columns agree, the entries reproduce the adjusted ledger, and the reported population preserves the Treasury bill's acquisition-date facts. A reviewer must still inspect the bank statement, deposit record, cleared-check images, contract, restriction release date, and cash-equivalent policy.
Verified calculation · scoped sums
The curriculum loader recomputed this example before it entered the site build. Expand any structured input to inspect the stated facts.
- amounts
- 9 fields
Inspect data
{
"bank_service_charge": -50,
"bank_statement_balance": 91450,
"compensating_balance": -50000,
"deposit_in_transit": 12000,
"ledger_balance": 88400,
"loan_principal": 500000,
"outstanding_checks": -17900,
"returned_check": -2800,
"treasury_bill": 25000
}- totals
- 4 fields
Inspect data
{
"adjusted_bank_balance": [
"bank_statement_balance",
"deposit_in_transit",
"outstanding_checks"
],
"adjusted_book_balance": [
"ledger_balance",
"returned_check",
"bank_service_charge"
],
"reported_unrestricted_cash_and_equivalents": [
"ledger_balance",
"returned_check",
"bank_service_charge",
"treasury_bill"
],
"usable_loan_proceeds": [
"loan_principal",
"compensating_balance"
]
}Recomputed result
| Measure | Value |
|---|---|
| adjusted bank balance | 85,550 |
| adjusted book balance | 85,550 |
| reported unrestricted cash and equivalents | 110,550 |
| usable loan proceeds | 450,000 |