Julian Company had cheques outstanding totalling $6,400 on its May 31 bank reconciliation. In June, Julian Company issued cheques totalling $38,900. The June bank statement shows that $26,300 in cheques cleared the bank in June. A cheque from one of Julian Company's customers in the amount of $300 was also returned marked "NSF." The amount of outstanding cheques on Julian Company's June 30 bank reconciliation should be
A) $12,600.
B) $19,000.
C) $17,700.
D) $7,200.

Question

Quizplus · Accepted Answer

The outstanding cheques at the end of June are calculated by adding the cheques issued in June ($38,900) to the outstanding cheques from May ($6,400) and then subtracting the cheques that cleared in June ($26,300). This results in $19,000 outstanding. The NSF cheque does not affect the outstanding cheques calculation.

Julian Company Had Cheques Outstanding Totalling $6,400 on Its May