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Ling Corp. deposits all receipts intact and makes all payments

Ling Corp. deposits all receipts intact and makes all payments by cheque. The following information is available

Question:

Ling Corp. deposits all receipts intact and makes all payments by cheque. The following information is available from the cash records:

Instructions

a. Determine the amount of deposits in transit and outstanding cheques at May 31. Keep in mind the time lag between deposits and cheques being recorded in the books and when they are recorded by the bank.

b. Prepare a May 31 bank reconciliation showing balance per bank statement and balance per books and correct cash balance.

c. Prepare the journal entry or entries to correct the Cash account at May 31.

Transcribed Image Text:

April 30 Bank Reconciliation Balance per bank Add: Deposits in transit Deduct: Outstanding cheques Balance per books $7120 1,540 (2,000) $ 6,660 Month of May Results Per Bank Per Books Balance on May 31 May deposits May cheques May note collected (not included in May deposits) May bank service charge May NSF cheque from a customer, returned by the bank (recorded by the bank as a charge) $8,760 $9,370 5,000 5,810 4,000 3,100 1,000 25 335

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a Calculation of deposits in transit Deposits per books 5810 Deposits per bank in Ma...View the full answer

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Intermediate Accounting Volume 1

ISBN: 978-1119496496

12th Canadian edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy

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Question Posted: Nov 28, 2019 09:03 AM

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