week 8 Bank reconciliations- Deposits in transit and outstanding checks

30 Sep No Comments

Bank reconciliations: Deposits in transit and outstanding checks

Bank reconciliations: Deposits in transit and outstanding checksLee Company’s May 31 bank reconciliation shows outstanding checks of $1,870. The Cash account in the general ledger shows total checks issued of $27,500 during June. The June bank statement shows that checks totalling $25,900 have cleared the bank.Required:What is the total amount of outstanding checks that would appear in the June 30 bank reconciliation?Note: Assume that all outstanding checks from the previous month have cleared the bank by the end of the current month. 

On May 31, there were $1,870 of outstanding checks. The June bank statement indicates cleared checks of $25,900, which includes the outstanding checks on May 31. Therefore, of the total checks that the bank cleared during June ($25,900), only $24,030 ($25,900 – $1,870) was paid by the bank for checks issued by Lee in June. Lee Company’s records indicate that they issued checks for $27,500 during June. The difference, $3,470 ($27,500 – $24,030), is the amount of outstanding checks at the end of June.

The amount of outstanding checks is $3,470.




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