Hot Sox Company had checks outstanding totaling $18200 on its May bank reconciliation. In June Hot Sox Company issued checks totaling $78900. The July bank statement shows that $71400 in checks cleared the bank in July. A check from one of Hot Sox Company's customers in the amount of $2200 was also returned marked "NSF." The amount of outstanding checks on Hot Sox Company's July bank reconciliation should be
A) $7500.
B) $23500.
C) $25700.
D) $27900.

Question

Quizplus · Accepted Answer

The outstanding checks at the end of July are calculated by taking the outstanding checks from May ($18200) plus the checks issued in June ($78900) minus the checks that cleared in July ($71400). This results in $18200 + $78900 - $71400 = $25700. The NSF check does not affect the outstanding checks calculation.

Hot Sox Company Had Checks Outstanding Totaling $18200 on Its