Question

I need help with the deposits in transit, outstanding checks, and that one joirnal entry please.

Teal Mountain Inc's bank statement from Main Street Bank at August 31, 2022, gives the following information Balance, August 1 $18,665 Bank debit memorandum: August deposits 71,265 Safety deposit box fee $85 Checks cleared in August 68,618 Service charge 1 110 Bank credit memorandum: Balance, August 31 21.222 Interest earned 105 A summary of the Cash account in the ledger for August shows the following: balance, August 1, $18,965; receipts $74,265; disbursements $73,510; and balance, August 31, $19.720. Analysis reveals that the only reconciling items on the July 31 bank reconciliation were a deposit in transit for $4,860 and outstanding checks of $4,560. 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 journalized and posted for $40.

Answer 1

	Receipt	$   74,265.00
	Add Deposit in transit July 31	$      4,860.00
		$   79,125.00
	Less August deposit as per Bank Statement	$   71,265.00
	Deposit in Transit	$      7,860.00
	Disbursement as per book	$   73,510.00
	Add Check outstanding July	$      4,560.00
		$   78,070.00
	Less Cleared check in August	$   68,618.00
	Check outstanding	$      9,452.00
	Journal entry	Dr	Cr
	Cash	$         105.00
	interest revenue		$ 105.00
	(To record Interest earned)
	accounts payable	$         360.00
	Cash		$ 360.00
	(To correct error in recording check)
	miscellaneous expense	$         110.00
	Cash		$ 110.00
	(To record service charge and safety deposit box fee)