The Cash Records of Mercury Company Show the Following

question 53

Essay

The cash records of Mercury Company show the following:
1. The June 30 bank reconciliation indicated that deposits in transit totaled $790. During July the general ledger account Cash shows deposits of $9,800, but the bank statement indicates that only $8,240 in deposits were received during the month.
2. The June 30 bank reconciliation also reported outstanding checks of $1,200. During the month of July, Mercury Company books show that $11,570 of checks were issued, yet the bank statement showed that $11,100 of checks cleared the bank in July.
There were no bank debit or credit memoranda and no errors were made by either the bank or Mercury Company.
Answer the following questions:
(a) What were the deposits in transit at July 31?
(b) What were the outstanding checks at July 31?

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Definitions:

Mean Difference

A statistical measure that represents the average difference between two sets of data points.

Statistical Significance

A measure that indicates how likely a result obtained from a study or experiment is not due to chance.

Sampling Error

Difference between results derived from testing an entire group of events or individuals, and results derived from testing a subset of the group.

Trend Analysis

The process of comparing business data over time to identify any consistent results or trends that can be used to make business decisions or predictions.