Exercise 7-11 Marin Inc.\'s bank statement from Main Street Bank at August 31, 2

Question

Exercise 7-11 Marin Inc.'s bank statement from Main Street Bank at August 31, 2017, gives the following information. Balance, August 1 August deposits Checks cleared in August Bank credit memorandum $18,580 71,180 68,613 Bank debit memorandum: Safety deposit box fee Service charge Balance, August 31 $90 115 21,052 Interest earned 110 A summary of the Cash account in the ledger for August shows the following: balance, August 1, $18,880 receipts $74,180; disbursements $73,505; and balance, August 31, S19,555. Analysiseveals that the only reconciling items on the July 31 bank reconciliation were a deposit in transit for $4,865 and outstanding checks of $4,565. 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 Determine deposits in transit. Deposits in transit SHOW LTST OF ACCOUNTS VIDEO: APPLTED SKILLS Determine outstanding checks. (Hint: You need to correct disbursements for the check error.) Outstanding checks VIDEO: APPLIED SKILLS

Explanation / Answer

Req a: Deposits in transit: Deposits during Aug 74180 Add: Beginning Deposit in transit 4865 Total 79045 Less: Deposits entry in bank 71180 Deposits in transit: 7865 Req b: Outstanding checks at end of Aug: Checks issued (73505+360) 73865 Add: beginning Check outstanding 4565 Total 78430 Lless: Checks cleared during Aug 68613 Ouotstanding checks in Aug end 9817 Bank Reconciliation Statement Balance as per Bank Statement 21052 Add: Deposit in transit 7865 28917 Less: Outstanding checks 9817 Adjusted balance in bank statement 19100 Balance as per books 19555 Add: Interest earned 110 19665 Less: Safety deposit fees 90 Service charges 115 Error in recording check issued 360 Adjusted balance in Books 19100 Journal entries Accounts title and explanations Debit $ Credit $ Cash account Dr. 110     Interest revenue Account 110 Locker's fees Account Dr. 90      Cash account 90 Misc. expense Account Dr. 115      Cash account 115 Accounts payable Account Dr. 360       Cash account 360

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