Question

Saturn Company deposits all receipts daily and makes all payments by cheque. The following information is available from the cash records of Saturn in the month of April, its first month of operations:

Month of April Results

                                                                                                   Per Bank Per Books

       Balance April 30...........................................................       $42,000      $42,140

       April deposits recorded.................................................         11,200        17,300

       April cheques recorded.................................................         12,010        14,320

Items on bank statement but not in books:

       Note collected by bank..................................................           5,500              -0-

       Bank service charge......................................................                50              -0-

       Customer’s NSF cheque returned by the bank.............           1,800              -0-

Instructions

a)    Calculate the amount of the April 30:

       1.    Deposits in transit

       2.    Outstanding cheques.

Deposits in transit:______________________________________________

Outstanding cheques:_______________________________________________

b)    What is the April 30 adjusted cash balance for Saturn? Show all work.

c)   Prepare any necessary journal entries by Saturn.

Answer 1

a)	1. Deposits in Transit (17300-11200)	6100
	2. Outstanding Check (14320-12010)	2310
b)	Adjusted Cash Balance :
	Balance as per Books	42140
	Add: Note Collected	5500
	Less: Bank Service Charge	-50
	Less: NSF Check	-1800
	Adjusted Cash Balance	45790
c)	General Journal	Debit	Credit
	Cash	5500
	Note Receivables		5500
	(To record collection of note by bank)
	Bank Charges	50
	Cash		50
	(To record bank charges)
	Accounts Receivables	1800
	(To check check returned as NSF)		1800