17. When preparing a bank reconciliation, deposits in transit are: a. b. C. d. a
ID: 2597444 • Letter: 1
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17. When preparing a bank reconciliation, deposits in transit are: a. b. C. d. added to the balance per bank statement. subtracted from the balance per bank statement. addedto the balance per company records subtracted from the balance per company records 18. CC owns a $600,000 building that waspurchased fouryears ago. The fim was recording depreciation under straight line method, estimating a 20-year service life and a $40,000 residual value. At the beginning ofthis, the 5th year, CC detemined that the residual value should be $60,000. As a result ofthis revision, depreciation in the current yearwould be: a. b. C. d. $24,250 $26,750 $27,000. $30,500Explanation / Answer
17.
Answer : a
Deposit in transit : A company's receipts that appear on the company's records but do not yet appear on the bank statement.
For example, a retail store's receipts of March 31 are deposited after banking hours on March 31 or on the morning of April 1. Those receipts are in the company's general ledger Cash account on March 31, but are not on the March 31 bank statement. As a result they are said to be "in transit" on March 31.
deposits in transit will added to the balance per bank statement
18
Answer : b
Book value at the begining of the 5th year : $488000 ( 600000 - (600000-40000) / 20 * 4 ]
Revised salvage value : $60000
Remaining life : 16years
Depreciation for current year : $26750 [(488000-60000) / 16]
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