Question

The cash records of the Margo Company show the following: 1. The March 31 bank reconciliation indicated that deposits in transit totaled $390 2. During April the Cash account shows deposits of $11,800, but the bank statement indicates that only $9,540 in deposits were received during the month 3. The March 31 bank reconciliation also reported outstanding checks of $850 4. During the month of April, the Margo Company books show that $11,670 of checks were issued, yet the bank statement showed that $10,500 of checks cleared the bank in April There were no bank debit or credit memoranda and no errors were made by either the bank or the Margo Company. Balance per books April 30 $ 905 Balance per bank statement April 30 $11,300 Required a. Calculate were the deposits in transit at April 30 b. Calculate the outstanding checks at April 30

Answer 1

(a) Deposits in Transit:
Deposits per books in August		$ 11,800
Deposits per the bank in August	$   (9,540)
Less: July 31 deposits in transit	$        390
August receipts deposited in August		$ (9,150)
Deposits in transit, August 31		$   2,650
(b) Outstanding Checks:
Checks per books in August		$ 11,670
Checks clearing the bank in August	$(10,500)
Less: Outstanding checks, July 31	$        850
August checks clearing in August		$ (9,650)
Outstanding checks, August 31		$   2,020
(Book checks. – (bank checks. – out. checks))