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, $14,590. 2. Cash balance according to the bank statement at July 31, $15,500. 3. Checks outstanding, $2,960. 4. Deposit in transit, not recorded by bank, $2,380. 5. A check for $480 issued in payment of an account was erroneously recorded in the check register as $840. 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 v Deduct outstanding checks v Adjusted balance Cash balance according to company's records Add error in recording check $840 instead of $480 v Deduct bank service charge v Adjusted balance
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, $14,590. 2. Cash balance according to the bank statement at July 31, $15,500. 3. Checks outstanding, $2,960. 4. Deposit in transit, not recorded by bank, $2,380. 5. A check for $480 issued in payment of an account was erroneously recorded in the check register as $840. 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 v Deduct outstanding checks v Adjusted balance Cash balance according to company's records Add error in recording check $840 instead of $480 v Deduct bank service charge v Adjusted balance
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![### 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, $14,590.
2. **Cash balance according to the bank statement** at July 31, $15,500.
3. **Checks outstanding**, $2,960.
4. **Deposit in transit**, not recorded by the bank, $2,380.
5. **A check for $480 issued in payment of an account** was erroneously recorded in the check register as $840.
6. **Bank debit memo for service charges**, $30.
#### Tasks
a. **Prepare a bank reconciliation**, using the format shown in Exhibit 12.
#### Bank Reconciliation Format
**Nakajima Co. Bank Reconciliation July 31**
- **Cash balance according to bank statement**: $[ ]
- **Add deposit in transit, not recorded by bank**: $[ ]
- **Deduct outstanding checks**: $[ ]
**Adjusted balance**: $[ ]
- **Cash balance according to company's records**: $[ ]
- **Add error in recording check $840 instead of $480**: $[ ]
- **Deduct bank service charge**: $[ ]
**Adjusted balance**: $[ ]
b. **If the balance sheet is prepared for Nakajima Co. on July 31, what amount should be reported for cash?**
$[ ]
c. **Must a bank reconciliation always balance (reconcile)?**
Yes ✔️
#### Explanation
In bank reconciliation:
- Adjust the bank statement balance by adding deposits in transit and subtracting outstanding checks to find the adjusted bank balance.
- Adjust the company's record by correcting recording errors and deducting any bank service charges to find the adjusted company's balance.
- The final adjusted balances from the bank statement and the company's records should match.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9557ab66-16b0-4733-a12e-96bc38d558c3%2F4447a2a0-1848-4325-b259-b12db6bf54e1%2F33oxcnw_processed.jpeg&w=3840&q=75)
Transcribed Image Text:### 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, $14,590.
2. **Cash balance according to the bank statement** at July 31, $15,500.
3. **Checks outstanding**, $2,960.
4. **Deposit in transit**, not recorded by the bank, $2,380.
5. **A check for $480 issued in payment of an account** was erroneously recorded in the check register as $840.
6. **Bank debit memo for service charges**, $30.
#### Tasks
a. **Prepare a bank reconciliation**, using the format shown in Exhibit 12.
#### Bank Reconciliation Format
**Nakajima Co. Bank Reconciliation July 31**
- **Cash balance according to bank statement**: $[ ]
- **Add deposit in transit, not recorded by bank**: $[ ]
- **Deduct outstanding checks**: $[ ]
**Adjusted balance**: $[ ]
- **Cash balance according to company's records**: $[ ]
- **Add error in recording check $840 instead of $480**: $[ ]
- **Deduct bank service charge**: $[ ]
**Adjusted balance**: $[ ]
b. **If the balance sheet is prepared for Nakajima Co. on July 31, what amount should be reported for cash?**
$[ ]
c. **Must a bank reconciliation always balance (reconcile)?**
Yes ✔️
#### Explanation
In bank reconciliation:
- Adjust the bank statement balance by adding deposits in transit and subtracting outstanding checks to find the adjusted bank balance.
- Adjust the company's record by correcting recording errors and deducting any bank service charges to find the adjusted company's balance.
- The final adjusted balances from the bank statement and the company's records should match.
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