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, $19,920. Cash balance according to the bank statement at August 31, $21,120. Checks outstanding, $4,040. Deposit in transit, not recorded by bank, $3,250. 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 $ Adjusted balance $ Cash balance according to company's records $ 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)?

Answer 1