The Records of Topper

question 74

Essay

The records of Topper. Ltd. show the following: 1. In February, deposits per the bank statement totaled $18,850; deposits per books $19,500; and deposits in transit at February 28 were $1,400. 2. In February, cheques issued per books were $17 ,750; cheques clearing the bank were $18,400; and outstanding cheques at February 28 were $1,250. There were no bank debit or credit memoranda and no errors were made by either the bank or Topper Ltd. Required: (a)Calculate the dollar amount of the deposits in transit at January 31. (b)Calculate the dollar amount of the outstanding cheques at January 31.

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Definitions:

Purchase Method

An accounting method for business combinations where the acquiring company records the assets and liabilities of the acquired company at their fair market values.

Pooling Method

An accounting technique used in mergers and acquisitions where the assets and liabilities of the merging companies are combined using their book values, rather than being re-valued or adjusted.

Market Share

The portion of a market controlled by a particular company or product, often expressed as a percentage of total sales in that market.

Spin-off

A type of corporate restructuring where a company creates a new independent company from its existing operations, assets, or divisions.