Question

Exercise C The bank statement for Yarley Company at the end of August showed a balance of $ 12,862.
Checks outstanding totaled $ 3,937, and deposits in transit were $ 5,990. If these amounts are the only
pertinent data available to you, what was the adjusted balance of cash at the end of August?

Answer 1

Balance as per Bank statement at the end of August $12,862

Less: Checks issued but not presented for payment ($3,937)

(Checks Outstanding)

Add: Cash Deposited but not credit in bank (Deposit in Transit) $5,990

Adjusted Balance of cash at the end of August    $14,915

NOTE: In the above solution it is assumed that check outstanding is those checks that are issued by Yarley company someone can also interpret as outstanding in the hands of Yarley Company (in that case amount will be added).

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