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12 March, 21:12

Darlene Company had checks outstanding totaling $5,400 on its June bank reconciliation. In July, Darlene Company issued checks totaling $38,900. The July bank statement shows that $26,300 in checks cleared the bank in July. A check from one of Darlene Company's customers in the amount of $300 was also returned marked "NSF." The amount of outstanding checks on Darlene Company's July bank reconciliation should be a. $12,600. b. $18,000. c. $17,700. d. $7,200.

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  1. 12 March, 22:02
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    b. $18,000

    Explanation:

    The computation of outstanding checks is shown below:-

    Outstanding checks as of the end of July = Start with outstanding checks as of June + Amount of checks issued in July - Amount of checks that cleared in July

    = $5,400 + $38,900 - $26,300

    = $44,300 - $26,300

    = $18,000

    Note, The $300 check was issued by a customer, not Darlene.

    So, for computing the outstanding checks as of the end of July we simply applied the above formula.
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