Question
In: Accounting
Bank Reconciliation The following data were accumulated for use in reconciling the bank account of Creative...
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)?
Solutions
Expert Solution
| 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 | |||||
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