Werth Inc.s bank statement from Hometown Bank at August 31, 2018, gives the following information.

Balance, August 1		$18,400		Bank debit memorandum:
August deposits		81,000		Safety deposit box fee		$ 25
Checks cleared in August		78,678		Service charge		50
Bank credit memorandum:				Balance, August 31		20,692
Interest earned		45

A summary of the Cash account in the ledger for August shows the following: balance, August 1, $18,700; receipts $84,000; disbursements $83,570; and balance, August 31, $19,130. Analysis reveals that the only reconciling items on the July 31 bank reconciliation were a deposit in transit for $4,800 and outstanding checks of $4,500. In addition, you 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.

1) Determine deposits in transit.

2)Determine outstanding checks. (Hint: You need to correct disbursements for the check error.)

3)Prepare A bank reconciliation at Augest 31.

4) Journalize the adjusting entries to be made by Hometown at Augest 31