EXERCISE $7-7$

Purpose: $($L$.$O$\mathrm{.}10)$ This exercise will illustrate how to determine deposits in transit and outstanding checks.

Shown below for Molly's Folly are the:

$(1)$ bank reconciliation at September $30,2002.$

$(2)$ 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 $30,2002$

Balance per bank statement

$\backslash$$ $15,000$

Add: Deposits in transit

September $29$

September $30$

Deduct: Outstanding checks

$\backslash [$

$\backslash$text $\{$ No$.\}514$

$\backslash ]$

No$.516$

No$.520$

No$.521$

No$.522$

Correct cash balance

Balance per books

Deduct: Customer's NSF check

Bank service charge

Correct cash balance

Bank Statement for October$-$Deposits Cash Receipts Journal

Bank Statement for October$-$Checks Paid and Debit Memos

Cash Payments Journal$-$Checks Issued