Milton Company has just received the following monthly bank statement for June 2012.

Data from the cash account of Milton Company for June are as follows:

At the end of May, Milton had three checks outstanding for a total of $4,560. All three checks were processed by the bank during June. There were no deposits outstanding at the end of May. It was discovered during the reconciliation process that a check for $8,050, written on June 4 for supplies, was improperly recorded on the books as $8,500.
Required:
1. Determine the amount of deposits in transit at the end of June.
2. Determine the amount of outstanding checks at the end of June.
3. Prepare a June bank reconciliation.
4. Prepare the journal entries to correct the cash account.
5. Interpretive Question: Why is it important that the cash account be reconciled on a timelybasis?

Transcribed Image Text:

e-000000 c-055005590055500 n-08816 558 2261603 la 5 4 0 0 8 0 8 4 2103887100 232) 2 2 2 2 2 3 3 2 2 2 2 3 3 3 4 0 505 5 5 7 123457901237012350 0000000111112 2223 D-Ju J J J J J J J J June 1 balances $20,440 Checks written: June 1 . Deposits: 0 1,500 8,500 2,690 550 7,500 650 700 1,000 1,300 . 1,360 S25,750 June 2.S 6,000 8,000 9,000 10 18 30 wee5,50 12 19 6,000 $34,500 27