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Problem Solving Survival Guide to accompany Financial Accounting, 8th Edition by Donald E. Kieso, Paul D. Kimmel, Jerry J. Weygandt

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EXERCISE 7-6

Purpose: (L.O. 7) This exercise will illustrate how to determine the amount of deposits in transit and outstanding checks at a given date.

Shown below for Molly's Folly are the

  • (1) bank reconciliation at September 30, 2014.
  • (2) listing of deposits for October per the bank statement.
  • (3) listing of deposits for October per the books.
  • (4) listing of checks paid by the bank during October.
  • (5) listing of checks written by the depositor during October.

Molly's Folly

BANK RECONCILIATION

September 30, 2014

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Bank Statement for October—Deposits

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Cash Receipts Journal

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Bank Statement for October—Checks Paid and Debit Memos

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Cash Payments Journal—Checks Issued

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Instructions

  • (a) Prepare a list of deposits in transit at October 31, 2014.
  • (b) Prepare a list of outstanding checks at October 31, 2014.
  • (c) Locate any errors per books assuming information recorded in the bank's records is correct.
  • (d) Locate any bank memoranda that will need to be recorded on the books.

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