Bank Statement
Balance 8/1 11284
August Deposits 47521
Check cleared in August 46175
Balance, 8/31 17146
Band Credit Memoranda:
Collectionof note receivable plus $105 interest 4505
Interest Earned 41
Bank debit Memorandum:
Safety deposit box rent 30

Cash account in the ledger for August shows:
Balance 8/1 10559
Receipts 50050
disbursements 47794
balance 8/31 12815
Analysis reveals that the only reconciling items on the July 31 bank reconciliation were a deposit in transit for 2200 and outstanding checks of 2925. The deposit in transit was the first deposit recorded by the bank in August.

In addition two errors :
1) A check for 340 to a creditor on account that cleared the bank in August was journalized and posted for 430
2) A salary check to an employee for $275 was recorded by the bank for $277.

Prepare a bank reconciliation at August 31.

I think that:
Deposit in transit=50050-47521+2200=4729
Outstanding checks=47794-46175+2925=4544

cash balance
cash balance per bank statement 17146
Add: deposit in transit 4729
Less: outstanding checks 4544
Adjust balance per bank $17331

Cash balance per books 12815
Add: Collection note receivable 4505
Interest earned 41
error-check 90

Less: safety deposit box rent 40
error-check 2
Adjust balance per books $17409

Can you suggest ? Thanks for your help.

Let's start with this

Analysis reveals that the only reconciling items on the July 31 bank reconciliation were a deposit in transit for 2200 and outstanding checks of 2925. The deposit in transit was the first deposit recorded by the bank in August

What part of the word only do you not understand because until you do understand we can not move on

let's start with this


what part of the word only do you not understand because until you do understand we can not move on


I know this is last month statement of deposit in transit and outstanding checks. Also, this deposit in transit recorded in August. But we did not know the outstanding checks status. Such like this:

Deposit in transit=50050-47521=2529
Outstanding checks=47794-46175+2925=4544

cash balance per bank statement: 17146
Add:deposit in transit 2529
Less: outstanding statement 4544
Adjust balance per bank $15131

The correct answer is $17421, so...

Thanks for your help.

I have reviewed the data and found that the bank reconcilliation does not balance by $88 which happens to be the value of the errors listed. Since this represents a minor difference and they can be ignored without affecting the Ledger Balance this course of action might be prudent in the circumstance. On the other hand as we don't know the date of these transactions it may be that they modify the balance of outstandings brought forward