The August 2014 bank statement for Allison Company and the August 2014 ledger ac
ID: 2426352 • Letter: T
Question
The August 2014 bank statement for Allison Company and the August 2014 ledger account for cash follow:
Outstanding checks at the end of July were for $300, $475, and $390. No deposits were in transit at the end of July.
Required information
1.
Compute the deposits in transit at the end of August by comparing the deposits on the bank statement to the deposits listed on the cash ledger account.
2. Compute the outstanding checks at the end of August by comparing the checks listed on the bank statement with those on the cash ledger account and the list of outstanding checks at the end of July.
The August 2014 bank statement for Allison Company and the August 2014 ledger account for cash follow:
Explanation / Answer
1)
The deposits amounting $5350 made in the cash ledger account on 31st august 2014 has not been recorded as deposit in the bank statement ending on the same date.
The deposit in transit as on 31st August 2014 = $5350
2)
The outstanding cheques at the end of July (amount $300, $390 and $475) are all presented to the bank on 2nd, 4th and 5th August.
The cheques issued on 4th, 20th and 23rd August amounting to $790, $255 and $19500 were issued and presented to the bank which has made the payment to the parties. However, the cheques issued on 15th and 17th amounting to $230 and $410 has not presented and cleared by the bank in the Month of August. Therefore the outstanding cheques as on 31st August are amounts to $230 (issued on 15th August) and $410 (issued on 17th August).
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