The cash records of Cullumber Company show the following. For July: For Septembe

Question

The cash records of Cullumber Company show the following.

For July:

For September:

There were no bank debit or credit memoranda, and no errors were made by either the bank or Cullumber Company.

Answer the following questions.

(a) In situation 1, what were the deposits in transit at July 31?

(b) In situation 2, what were the outstanding checks at July 31?

(c) In situation 3, what were the deposits in transit at August 31?

(d) In situation 4, what were the outstanding checks at August 31?

1. The June 30 bank reconciliation indicated that deposits in transit total $710. During July, the general ledger account Cash shows deposits of $17,720, but the bank statement indicates that only $15,800 in deposits were received during the month. 2. The June 30 bank reconciliation also reported outstanding checks of $935. During the month of July, Cullumber Company books show that $17,980 of checks were issued, yet the bank statement showed that $16,090 of checks cleared the bank in July.

Explanation / Answer

a) Deposits in transit at july 31 = 710+17720-15800 = 2630

b) Outstanding checks at july 31 = 935+17980-16090 = 2825

c) Deposit in transit at august 31 = 2770+26850-26440 = 3180

d) Outstanding checks at august 31 = 2200+24530-23410 = 3320

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