Part 1: 1. Identify and list the deposits in transit at the end of December.2. Identify and list the outstanding checks at the end of December. Part 2: Prepare a bank reconciliation for December. Part 3: 1. Record the interest of $60 received from the bank. 2. Record the service charges of $130 deducted by the bank. 3. Record the return of the J. Left check of $280 due to insufficient funds4. Record the checks outstanding at the end of the month.5. Record the deposit in transit at the end of the month.Part 4: After the reconciliation journal entries are posted, what balance will be reflected in the Cash account in the ledger? If the company also has $280, of petty cash on hand, which is recorded in a different account called Petty Cash on Hand, what total amount of Cash and Cash Equivalents should be reported on the December 31 balance sheet? **PA5-3 (Algo) Identifying Outstanding Checks and Deposits in Transit and Preparing a Bank Reconciliation and Journal Entries (LO 5-4, LO 5-5)***The following information applies to the questions displayed below.*The December bank statement and cash T-account for Stewart Company follow:---### BANK STATEMENT| Date | Checks | Deposits | Other | Balance ||--------------|-----------|------------|-----------------------------------------------|-----------|| December 1 | | | | $45,600 || December 6 | $7,600 | | | 38,000 || December 11 | | $27,000 | | 64,470 || December 17 | 12,900 | | | 51,570 || December 23 | | | 35,000 | || December 26 | | | | 86,570 || December 30 | 17,800 | $18,000 | NSF* | 86,040 || | | | $280 | || December 31 | | | Interest earned | 85,960 || December 31 | | | $60 | 86,020 || December 31 | | | Service charge | || December 31 | | | $130 | 85,890 |*NSF check from J. Left, a customer.---### Cash (A)#### Debit- **Date**: December 1 - **Item**: Balance - **Amount**: 45,600- **Date**: December 11 - **Item**: Deposits - **Amount**: 27,000- **Date**: December 23 - **Item**: Deposits - **Amount**: 35,000- **Date**: December 30 - **Item**: Deposits - **Amount**: 18,000- **Date**: December 31 - **Item**: Deposits - **Amount**: 12,000

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Part 1: 1. Identify and list the deposits in transit at the end of December. 2. Identify and list the outstanding checks at the end of December. Part 2: Prepare a bank reconciliation for December. Part 3: 1. Record the interest of $60 received from the bank. 2. Record the service charges of $130 deducted by the bank. 3. Record the return of the J. Left check of $280 due to insufficient funds 4. Record the checks outstanding at the end of the month. 5. Record the deposit in transit at the end of the month. Part 4: After the reconciliation journal entries are posted, what balance will be reflected in the Cash account in the ledger? If the company also has $280, of petty cash on hand, which is recorded in a different account called Petty Cash on Hand, what total amount of Cash and Cash Equivalents should be reported on the December 31 balance sheet?

**PA5-3 (Algo) Identifying Outstanding Checks and Deposits in Transit and Preparing a Bank Reconciliation and Journal Entries (LO 5-4, LO 5-5)**

*The following information applies to the questions displayed below.*

The December bank statement and cash T-account for Stewart Company follow:

---

### BANK STATEMENT

| Date | Checks | Deposits | Other | Balance |
|--------------|-----------|------------|-----------------------------------------------|-----------|
| December 1 | | | | $45,600 |
| December 6 | $7,600 | | | 38,000 |
| December 11 | | $27,000 | | 64,470 |
| December 17 | 12,900 | | | 51,570 |
| December 23 | | | 35,000 | |
| December 26 | | | | 86,570 |
| December 30 | 17,800 | $18,000 | NSF* | 86,040 |
| | | | $280 | |
| December 31 | | | Interest earned | 85,960 |
| December 31 | | | $60 | 86,020 |
| December 31 | | | Service charge | |
| December 31 | | | $130 | 85,890 |

*NSF check from J. Left, a customer.

---

### Cash (A)

#### Debit

- **Date**: December 1
- **Item**: Balance
- **Amount**: 45,600

- **Date**: December 11
- **Item**: Deposits
- **Amount**: 27,000

- **Date**: December 23
- **Item**: Deposits
- **Amount**: 35,000

- **Date**: December 30
- **Item**: Deposits
- **Amount**: 18,000

- **Date**: December 31
- **Item**: Deposits
- **Amount**: 12,000

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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