Question

In preparing a bank reconciliation, the adjusted cash balance per bank is $12,540. if outstanding checks total $4,250 and the cash balance per bank statement is $13,875, what amount represents deposits in transit?

a. $7,165
b. $9,625
c. $2,915
d. $8,290

Answer 1

The amount representing deposits in transit is $2,915, found by adding the outstanding checks to the adjusted cash balance per bank, then subtracting the cash balance per bank statement.

Step-by-step explanation:

In the bank reconciliation, the adjusted cash balance per bank is given as $12,540. To calculate the deposits in transit, we need to consider the outstanding checks totaling $4,250 and the cash balance per bank statement which is $13,875. Deposits in transit can be found by adjusting the bank statement balance to match the adjusted cash balance per bank. The formula to find the deposits in transit is:

Deposits in Transit = Adjusted Cash Balance per Bank + Outstanding Checks - Cash Balance per Bank Statement

Hence,

Depits in Transit = $12,540 + $4,250 - $13,875

Deposits in Transit = $2,915

Therefore, the correct amount representing deposits in transit is $2,915, which corresponds to option c.