Question

Exercise 5-11 Marin Inc.'s bank statement from Main Street Bank at August 31, 2017, gives the following information $ 100 Balance, August 1 August deposits Checks cleared in August Bank credit memorandum: Interest eamed $18,685 Bank debit memorandum: 71,285 Safety deposit box fee 68,603 Service charge Balance, August 31 120 125 21,262 A summary of the Cash account for August shows the following: balance, August 1, $18,985; receipts $74,285; disbursements $73,495; and balance, August 31, $19,775. Analysis reveals that the only reconciling items on the July 31 bank reconciliation were a deposit in transit for $4,875 and outstanding checks of $4,575. In addition, you determine that there was an error involving a company check drawn in August: A check for $400 to a creditor on account that cleared the bank in August was recorded for $40. Determine deposits in transit. Deposits in transit LINK TO TEXT Determine outstanding checks. (Hint: You need to correct disbursements for the check error.) Outstanding checks LINK TO TEXT Prepare a bank reconciliation at August 31. (List Items

Answer 1

Ques 1
Deposits in transit
difference aug deposits and cash receipts	3000
Add:deposits in transit	4875
total	7875
Ques 2
Outstanding checks
difference aug checks cleared and cash disbursement	4892
Add:O/S checks	4575
Add:Error in check	360
total	9827

Ques 2

bank reconciliation statement
Cash balance as per bank statement	21262
Add:deposit in transit	7875
	29137
Less:outstanding checks	9827
Adjusted cash balance as per bank	19310
Cash balance as per books	19775
Ad:interest earned	120
	19895
Less:
Service charge	125
error in recording check	360
safety deposit box rent	100
	585
adjusted cash balance as per books	19310

Ques 3

	Cash	=	Accounts payable	+	Rev	-	Exp	Remarks
Aug-31	120	=		+	120	-		Interest revenue
Aug-31	-360	=	-360	+		-		NA
Aug-31	-225	=		+		-	225	Bank charges expense