Consider the following situations for Company A: Situation #1: On the June 30 ba
ID: 2457113 • Letter: C
Question
Consider the following situations for Company A: Situation #1: On the June 30 bank reconciliation, deposits in transit total $720. During July, the Cash account in the general ledger shows deposits of $15,750. The bank statement for July shows that $15,600 in deposits were received during the month. Situation #2: On the June 30 bank reconciliation, outstanding checks were $680. During the month of July, the Cash account in the general ledger shows that $17,200 of checks were issued. The bank statement showed that $16,400 of checks cleared the bank in July. Situation #3: In September, deposits per the bank statement totaled $26,700, deposits per books were $25,400, and deposits in transit at September 30 were $2,100. Situation #4: In September, cash disbursements per books were $23,700, checks clearing the bank were $25,000, and outstanding checks at September 30 were $2,100. In all 4 situations, there were no bank debit or credit memos. Also, no Cash account errors were made by either the bank of the company. In situation #1, the deposits in transit at July 31 were $Explanation / Answer
The bank statment for july shows deposit of $15,600 but $ 720 of that was from deposits in transit from June. So the bank has recorded $ 14,880 in deposits from the 15,750 in cash account.
So deposit in transit at july 31 = 15,750 - 14,880
= $870