Kline Company had checks outstanding totaling $19,200 on its May bank reconciliation. In June, Kline Company issued checks totaling $119,700. The July bank statement shows that $89,100 in checks cleared the bank in July. A check from one of Kline Company's customers in the amount of $900 was also returned marked "NSF." The amount of outstanding checks on Kline Company's July bank reconciliation should be
A) $58,800.
B) $30,600.
C) $49,800.
D) $10,400.

Question

Quizplus · Accepted Answer

To find the outstanding checks on Kline Company's July bank reconciliation, we need to start with the checks outstanding from the May bank reconciliation and subtract any checks that have cleared the bank. Then we need to add any new checks issued in June and subtract any checks that bounced or were returned.

Checks outstanding from May: $19,200
Checks issued in June: $119,700
Checks that cleared in July: $89,100
NSF check: -$900

$19,200 - $89,100 = -$69,900

This means that there were checks outstanding that cleared the bank before July, resulting in a negative balance. We need to add the June checks and subtract the NSF check to get the correct outstanding balance.

-$69,900 + $119,700 - $900 = $49,800

Therefore, the amount of outstanding checks on Kline Company's July bank reconciliation is $49,800. The correct choice is C.

Kline Company Had Checks Outstanding Totaling $19,200 on Its May