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Step 2. Outstanding checks (-). Compare the paid checks shown on the bank statement or the paid checks returned with the bank statement with (a) checks outstanding from the preceding bank reconciliation, and (b) checks issued by the company as recorded in the cash payments journal. Issued checks recorded by the company that have not been paid by the bank represent outstanding checks. Deduct outstanding checks from the balance per bank. Bank Statement Checks Paid Cash Payments Journal Checks Issued Date 5-4 5-2 5-17 5-12 5-20 5-29 5-30 Check No. 254 257 258 259 260 263 262 Amount $650 410 159 275 925 480 750 Date 5-2 5-5 5-10 5-15 5-22 5-24 5-29 Check No. 258 259 260 261 262 263 264 Amount $159 275 925 500 750 480 360 Instructions Using step 2 in the reconciliation procedure (see page 335), list the outstanding checks at May 31. E7-8 The following information pertains to Lance Company. 1. Cash balance per bank, July 31, $7,328. 2. July bank service charge not recorded by the depositor $38. 3. Cash balance per books, July 31, $7,364. 4. Deposits in transit, July 31, $2,700, 5. $2,016 collected for Lance Company in July by the bank through electronic funds Pre adj (LO transfer. The collection has not been recorded by Lance Company 6. Outstanding checks, July 31, $686. Instructions (a) Prepare a bank reconciliation at July 31, 2017 (b) Journalize the adjusting entries at July 31 on the books of Lance Company

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