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Ling Corp. deposits all receipts intact and makes all payments

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 from the cash records:

Instructions
(a) Keeping in mind the time lag between deposits and cheques being recorded in the books and when they are recorded by the bank, determine the amount of outstanding deposits and outstanding cheques at May 31.
(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.

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April 30 Bank Reconciliation Balance per bank Add: Deposits in transit Deduct: Outstanding cheques Balance per books $7,120 1,540 (2.000) $ 6,660 Month of May Results 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 Per Bank $8,760 5,000 4,000 1,000 25 335 Per Books $9,370 5,810 3,100 (recorded by the bank as a charge)