The following data were accumulated for use in reconciling the bank account of Creative Design Co. for
Fantastic news! We've Found the answer you've been seeking!
Question:
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 August31, $14,900.
- Cash balance according to the bank statement at August 31, $15,900.
- Checks outstanding, $3,020.
- Deposit in transit, not recorded by bank, $2,430.
- A check for $270 in payment of an account was erroneously recorded in the check register as $720.
- 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 | $ | |
|
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)?
Entries for 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 August31, $22,100.
- Cash balance according to the bank statement at August 31, $23,310.
- Checks outstanding, $4,490.
- Deposit in transit not recorded by bank, $3,600.
- A check for $480 in payment of an account was erroneously recorded in the check register as $840.
- Bank debit memo for service charges, $40.
Journalize the entries that should be made by the company that(a) increase cash and (b) decrease cash.
a. 20Y6 Aug. 31 | Cash | ||
Accounts Payable | |||
b. Aug. 31 | Miscellaneous Expense | ||
Cash |
Related Book For
Accounting
ISBN: 9781337902687
28th Edition
Authors: Carl S. Warren, Christine Jonick, Jennifer Schneider
Posted Date: