### Bank ReconciliationThe 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.#### Tasksa. **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 ✔️#### ExplanationIn 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.

Bank reconciliation statement is prepared to reconcile the balance as per Cash book and Bank balance. b. The reported cash balance in Balance Sheet would be $14920 c. The bank reconciliation statement must always reconcile.

Business

Accounting

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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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