Directions:

A) determine deposits in transit

B) determine outstanding checks (you need to correct disbursements for the check error)

C)prepare a bank reconciliation at August 31

D)journalists the adjusting entry(ies) to be made by werth inc at August 31.

nthe following questions (a) In situation I, what were the deposi d) n siruation 4, what were the outstanding ch osits in transit at July 31? checks at July 31? tion 2, what were the outstanding ch 3, what were the deposits in transit at Au gust 31? August 31? Werth Inc.'s bank statement irom Hometown Bank at August 31,2014, gives the Preper bank following information Balance, August 1 August deposits Checks cleared in August Bank credit memorandum: $18,400 71,000 68,678 Bank debit memorandum Safety deposit box fee Service charge Balance, August 31 g ch 25 45 20,692 Interest earned Asut of the Cash account in the ledger for August shows the followin 8,700 receipts $74,000: disbursements $73,570: and halance Aua st 1, $18 August 3, 1O 130. Analysis reveals that the only reconciling items on the July 31 bank ation were a deposit in transit for $4,800 and outstanding checks of $4,500. In adition. vou determine that there was an error involving a company check drawn in August A check for $400 to a creditor on account that cleared the bank in August was journalized and posted for $40. reconcili. rest $36 less interest has