C is corrent. The balance per bank statement ($36,050) must be adjusted to reflect deposits in transit and corrections as of 3/31/Y2 not yet recorded by the bank.
Balance per bank
$36,050
Add: Deposit in transit
6,250
$42,300
Deduct: Outstanding checks
$5,750
Bank error
250
(6,000)
Correct balance
$36,300
The bank service charges ($50) would be an adjustment to balance per books; it has already been recorded in the bank’s records. A is incorrect becasue (1) the deposits in transits should be added, not subtracted, (2) the outstanding checks should be subtracted, not added, and (3) the service charge should be ignored since the bank’s record already reflects this amount. B is incorrect because it fails to correct for the erroneous bank credit of $250. D is incorrect because the cash balance needs to be adjusted by deposits in transit, outstanding checks, and erroneous credits/debits.
