Exercise 7-11 Mazor Inc.%u2019s bank statement from Hometown Bank at August 31,

Question

Exercise 7-11 Mazor Inc.%u2019s bank statement from Hometown Bank at August 31, 2012, gives the following information.

Balance, August 1 $18,750 Bank debit memorandum: August deposits 71,350   Safety deposit box fee $ 85 Checks cleared in August 68,618 Service charge 110 Bank credit memorandum: Balance, August 31 21,392   Interest earned 105
A summary of the Cash account in the ledger for August shows the following: balance, August 1, $19,050; receipts $74,350; disbursements $73,510; and balance, August 31, $19,890. Analysis reveals that the only reconciling items on the July 31 bank reconciliation were a deposit in transit for $4,860 and outstanding checks of $4,560. In addition, you determine that there was an error involving a company check drawn in August: A check for $510 to a creditor on account that cleared the bank in August was journalized and posted for $51. Mazor Inc.%u2019s bank statement from Hometown Bank at August 31, 2012, gives the following information. A summary of the Cash account in the ledger for August shows the following: balance, August 1, $19,050; receipts $74,350; disbursements $73,510; and balance, August 31, $19,890. Analysis reveals that the only reconciling items on the July 31 bank reconciliation were a deposit in transit for $4,860 and outstanding checks of $4,560. In addition, you determine that there was an error involving a company check drawn in August: A check for $510 to a creditor on account that cleared the bank in August was journalized and posted for $51.

Explanation / Answer

Hi,

Please find the answer as follows:

Deposits in transit = 74350 - (71350 - 4860) = 7860

Answer is 7860

Thanks.

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