Question

In the month of May, Kijak Company Inc. wrote checks in the amount of $28,000. In June, checks in the amount of $38,000 were written. In May, $25,000 of these checks were presented to the bank for payment, and $33,000 in June. What is the amount of outstanding checks at the end of June?

A) $3,000
B) $5,000
C) $8,000
D) $10,000

Answer 1

The correct answer is option (c).

Step-by-step explanation:

According to the scenario, the computation of the given data are as follows:

Checks written, May = $28,000

Checks written, June = $38,000

So, Total checks written in May and June = $28,000 + $38,000

= $66,000

And Checks presented, May = $25,000

Checks presented, June = $33,000

So, Total checks presented in May and June = $25,000 + $32,000

= $58,000

So, we can calculate the outstanding amount at the end of June by using following formula:

Amount at the end of June = Total checks written - Total checks presented

= $66,000 - $58,000

= $8,000.