Question

Bank Reconciliation

The following data were accumulated for use in reconciling the bank account of Creative Design Co. for August 20Y6:

1. Cash balance according to the company's records at August 31, $16,290.

2. Cash balance according to the bank statement at August 31, $17,260.

3. Checks outstanding, $3,310.

4. Deposit in transit, not recorded by bank, $2,660.

5. A check for $480 in payment of an account was erroneously recorded in the check register as $840.

6. Bank debit memo for service charges, $40.

a.  Prepare a bank reconciliation, using the format shown in Exhibit 13.

Creative Design Co.
Bank Reconciliation
August 31, 20Y6
Cash balance according to bank statement		$
Add: Deposit in transit on August 31	$
Deduct: Outstanding checks
Adjusted balance		$
Cash balance according to company's records		$
Add: Error in recording check
Deduct: Bank service charge
Adjusted balance		$

Feedback

a. Set up two sections: one for the company cash account section and the other for the bank balance section. Determine the effect of the data on each section. Recall that when you are finished, the adjusted balances in the bank and company sections of the reconciliation must be equal. If not, an item has been overlooked or treated in error.

b.  If the balance sheet were prepared for Creative Design Co. on August 31, what amount should be reported for cash?
$

c.  Must a bank reconciliation always balance (reconcile)?
Yes 

Bank Reconciliation

The following data were accumulated for use in reconciling the bank account of Creative Design Co. for August 20Y6:

1. Cash balance according to the company's records at August 31, $16,290.

2. Cash balance according to the bank statement at August 31, $17,260.

3. Checks outstanding, $3,310.

4. Deposit in transit, not recorded by bank, $2,660.

5. A check for $480 in payment of an account was erroneously recorded in the check register as $840.

6. Bank debit memo for service charges, $40.

a.  Prepare a bank reconciliation, using the format shown in Exhibit 13.

Creative Design Co.
Bank Reconciliation
August 31, 20Y6
Cash balance according to bank statement		$
Add: Deposit in transit on August 31	$
Deduct: Outstanding checks
Adjusted balance		$
Cash balance according to company's records		$
Add: Error in recording check
Deduct: Bank service charge
Adjusted balance		$

Feedback

a. Set up two sections: one for the company cash account section and the other for the bank balance section. Determine the effect of the data on each section. Recall that when you are finished, the adjusted balances in the bank and company sections of the reconciliation must be equal. If not, an item has been overlooked or treated in error.

b.  If the balance sheet were prepared for Creative Design Co. on August 31, what amount should be reported for cash?
$

c.  Must a bank reconciliation always balance (reconcile)?
Yes