Response to the following problem:
Pike Hospital's bank statement shows a March 31 balance of $4,200. An analysis discloses that $1,500 of checks are outstanding and that there is a deposit in transit of $900 at March 31. Bank service charges for March were $25 and an NSF check of $175 was charged against the hospital's account by the bank on March 28. The hospital had deposited this patient's check on March 19. The hospital made a deposit of $400 on March 21 that does not appear on the March bank statement, and the bank admitted its error when contacted about it. On March 25, one of the hospital's bookkeepers journalized a properly drawn $50 check (issued in payment of a supplier's invoice) as $500.
Required:
(1) What amount should the hospital report as cash in bank in its March 31 balance sheet?
(2) What adjusting entry should the hospital make on March 31?