Question

Bank Reconciliation The following data were accumulated for use in reconciling the bank account of Nakajima Co, for July: 1. Cash balance according to the company's records at July 31, $49,910. 2. Cash balance according to the bank statement at July 31, $48,250. 3. Checks outstanding, $4,460. 4. Deposit in transit, not recorded by bank, $6,450. 5. A check for $590 issued in payment of an account was erroneously recorded in the check register as $950. 6. Bank debit memo for service charges, $30. a. Prepare a bank reconciliation, using the format shown in Exhibit 12. Nakajima Co. Bank Reconciliation July 31 Cash balance according to bank statement Add deposit in transit, not recorded by bank Adjusted balance Cash balance according to company's records Adjusted balance Check My Work Previous NE 19 ? tv 80 209 F 190 $ 4 % 5 A 6 & 7 8 9 0 = R T Y 0 Р C

Answer 1

Answer to First Part (a)

Nakajima Co.

Bank Reconciliation

July 31

Cash balance according to bank statement $48,250

Add deposit in transit , not recorded by bank $6450

Add bank debit memo for service charges $30 $6480

$54730

Less Checks Outstanding $4,460

Less Check issued erroneously recorded

in the check register$(950-590) $360 $4820

Cash Balance according to company

records $49910

Less Bank Debit Memo for service charges $30

Add Check Issued erroneously recorded in

the check register $(950-590) now corrected $360 $330

Adjusted balance $50240

Answer to second part (b)

If the balance sheet is prepared for Nakajima Co. on July 31 , amount should be reported

for cash is $50240 ( as calculated above)

Answer to third part (c) A bank reconciliation should always balance (reconcile). A bank reconciliation is done to prepare the difference between the bank statement and cash balance as per company's records. If all transactions could be identified then bank reconciliation should always reconcile.