The August 2014 bank statement for Allison Company and the August 2014 ledger account for cash follow:

Outstanding checks at the end of July were for $270, $430, and $320. No deposits were in transit at the end of July.

Required:

1. Compute the deposits in transit at the end of August by comparing the deposits on the bank statement to the deposits listed on the cash ledger account.

2. Compute the outstanding checks at the end of August by comparing the checks listed on the bank statement with those on the cash ledger account and the list of outstanding checks at the end of July.

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. What total amount of cash should be reported on the August 31, 2014, balancesheet?

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BANK STATEMENT Date Checks and EFTs Deposits Balance Aug. 1 S17,510 17,190 28,890 28,460 28,190 27,310 27,060 31,060 30,710 10,310 16,810 15,960 18,310 18,190 S 320 S11,700 430 270 880 4 10 15 21 250 EFT 4,000 350 20,400 25 30 30 31 6,500 850 EFT 2,350* 120 $2,350 interest collected. Bank service charge. Cash (A) Aug. 1 Balance Deposits Aug. 2 12 24 31 16,490 Checks written and electronic funds transfers EFT 250 880 280 510 EFT 850 350 20,400 Aug. 2 11,700 4,000 6.500 5,200 15 17 18 20 23