The August 2004 bank statement for Martha Company and the August 2004 ledger accounts for cash follow:

Outstanding checks at the end of July were for S250, $400, and $300. No deposits were in transit at the end of July.
Required: 1. Compute the deposits in transit at the end of August. 2. Compute the outstanding checks at the end of August. 3. Prepare a bank reconciliation for August. 4. Give any journal entries that the company should make as a result of the bank reconciliation. Why are they necessary? 5. After the reconciliation journal entries are posted, what balances would be reflected in the cash accounts in the ledger? 6. What total amount of cash should be reported on the August 31, 2004, balance sheet?

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BANK STATEMENT Date Checks Deposits Balance Aug. 1 1234590 $17.470 $ 300 17.170 $12.000 29.170 400 28.770 250 28.520 900 27,620 300 27.320 15 4.000 31.320 21 400 30.920 24 21.000 9.920 25 7.000 16.920 30 800 16.120 30 2.180* 18.300 31 100+ 18.200 *$2.180 interest collected. +Bank service charge.