Asked by Francis Ogega on May 25, 2024
Verified
The cash records of Saturn Company show the following:
1. The June 30 bank reconciliation indicated that deposits in transit totaled $970. During July the general ledger account Cash shows deposits of $9700 but the bank statement indicates that only $8420 in deposits were received during the month.
2. The June 30 bank reconciliation also reported outstanding checks of $2100. During the month of July Saturn Company books show that $11750 of checks were issued yet the bank statement showed that $11100 of checks cleared the bank in July.
There were no bank debit or credit memoranda and no errors were made by either the bank or Saturn Company.
Answer the following questions:
(a) What were the deposits in transit at July 31?
(b) What were the outstanding checks at July 31?
Deposits In Transit
Funds that have been deposited in a bank account but not yet recorded by the bank, leading to a difference between the company's records and the bank statement.
Outstanding Checks
Checks that have been written and recorded in the issuing company's books but have not yet been cleared by the bank.
- Learn and apply the technique of reconciling banking transactions.
Verified Answer
SM
sushmi maharjanMay 25, 2024
Final Answer :
(a)
Deposits in Transit: Deposits per books in July 9,700 Deposits per the bank in July $8,420 Less: June 30 deposits in transit. 970 July receipts deposited in July7,450 Deposits in transit, July 31 $2,250\begin{array}{lrr} \text { Deposits in Transit: } &\\ \text {Deposits per books in July } &&9,700\\ \text { Deposits per the bank in July } &\$8,420\\ \text { Less: June 30 deposits in transit. } &970\\ \text { July receipts deposited in July} &&7,450\\ \text { Deposits in transit, July 31 } &&\$2,250\\\end{array} Deposits in Transit: Deposits per books in July Deposits per the bank in July Less: June 30 deposits in transit. July receipts deposited in July Deposits in transit, July 31 $8,4209709,7007,450$2,250
(b) Outstanding Checks: \text { Outstanding Checks: } Outstanding Checks:
Checks per books in July $11,750Checks clearing the bank in July $11,100 Less: Outstanding checks, June 302,100 July checks clearing in July 9,000 Outstanding checks, July 31$2,750\begin{array}{lrr} \text {Checks per books in July } &&\$11,750\\ \text {Checks clearing the bank in July } &\$11,100\\ \text { Less: Outstanding checks, June 30} &2,100\\ \text { July checks clearing in July } &&9,000\\ \text { Outstanding checks, July 31} &&\$2,750\\\end{array}Checks per books in July Checks clearing the bank in July Less: Outstanding checks, June 30 July checks clearing in July Outstanding checks, July 31$11,1002,100$11,7509,000$2,750
Deposits in Transit: Deposits per books in July 9,700 Deposits per the bank in July $8,420 Less: June 30 deposits in transit. 970 July receipts deposited in July7,450 Deposits in transit, July 31 $2,250\begin{array}{lrr} \text { Deposits in Transit: } &\\ \text {Deposits per books in July } &&9,700\\ \text { Deposits per the bank in July } &\$8,420\\ \text { Less: June 30 deposits in transit. } &970\\ \text { July receipts deposited in July} &&7,450\\ \text { Deposits in transit, July 31 } &&\$2,250\\\end{array} Deposits in Transit: Deposits per books in July Deposits per the bank in July Less: June 30 deposits in transit. July receipts deposited in July Deposits in transit, July 31 $8,4209709,7007,450$2,250
(b) Outstanding Checks: \text { Outstanding Checks: } Outstanding Checks:
Checks per books in July $11,750Checks clearing the bank in July $11,100 Less: Outstanding checks, June 302,100 July checks clearing in July 9,000 Outstanding checks, July 31$2,750\begin{array}{lrr} \text {Checks per books in July } &&\$11,750\\ \text {Checks clearing the bank in July } &\$11,100\\ \text { Less: Outstanding checks, June 30} &2,100\\ \text { July checks clearing in July } &&9,000\\ \text { Outstanding checks, July 31} &&\$2,750\\\end{array}Checks per books in July Checks clearing the bank in July Less: Outstanding checks, June 30 July checks clearing in July Outstanding checks, July 31$11,1002,100$11,7509,000$2,750
Learning Objectives
- Learn and apply the technique of reconciling banking transactions.
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