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    Amount of deposits in transit and outstanding checks

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    Northville Paper and Paint deposits all receipts and makes all payments by check. The following information is available from the cash records:

    Month of May Results

    Per Bank Per Books

    Balance May 31 $27,995 $24,355
    May deposits 10,000 12,889
    May checks 11,100 16,080
    May note collected 3,000 -0-
    (not included in April deposits)
    May bank service charge 35 -0-
    May NSF check of a customer 900 -0-
    returned by the bank
    (recorded by bank as a charge)

    Calculate the following amounts:
    1. Deposits in transit on May 31.
    2. Outstanding checks on May 31.

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    1. The deposits should by the bank are $10,000 while the deposit recorded ...

    Solution Summary

    The solution explains how to calculate the amount of deposits in transit and outstanding checks in relation to bank reconciliation.