Question

Bank Reconciliation

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

Cash balance according to the company's records at August 31, $20,180.

Cash balance according to the bank statement at August 31, $21,020.

Checks outstanding, $4,100.

Deposit in transit, not recorded by bank, $3,290.

A check for $340 in payment of an account was erroneously recorded in the check register as $430.

Bank debit memo for service charges, $60.

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		$
Adjustments:
Total adjustments
Adjusted balance		$
Cash balance according to company's records		$
Adjustments:
	$
Total adjustments
Adjusted balance		$

b. If the balance sheet were prepared for Maplewood Co. on August 31, 2016, what amount should be reported for cash?
$

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

Answer 1

a)	BaNk Reconciliation Statement
	Creative Design Co.
	Bank Reconciliation
	Aug 31, 20Y6
	Cash Balance according to bank statement					$21,020
	Adjustment
	Less : Checks Outstanding				$4,100
	Less: Errorly payment of 340 return return as 430 in company books
				( 430 - 340)	$90	$4,190
						$16,830
	Add: Deposit in trasit not recorded in bank				$3,290
	Add: Bank Debit memo For Service Charges				$60	$3,350
	Cash Balance according to Company Records					$20,180
	Alternate
	Cash Balance according to Company Records					$20,180
	Adjustment
	Add : Checks Outstanding				$4,100
	Add: Errorly payment of 340 return return as 430 in company books
				( 430 - 340)	$90	$4,190
						$24,370
	Less: Deposit in trasit not recorded in bank				$3,290
	Less: Bank Debit memo For Service Charges				$60	$3,350
	Cash Balance according to bank statement					$21,020

b)	If Balance Sheet Cash Balance To be recorded in baalance sheet
	Cash Balance according to Company Records					$20,180
	Less Service charges					$60
	Add: Errorly payment of 340 return return as 430 in company books
		( 430 - 340)				$90
		Cash Balance in Balance Sheet				$20,210

C)	Bank reconcilition is prepare to reconclie cash balance as per company records and cash balance as per bank statement so must reconcile that mention reason why balance differ