The following data were accumulated for use in reconciling the bank account of Creative Design Co. for August 20Y6: 1. Cash balance according to the company's records at August 31, $26,070. 2. Cash balance according to the bank statement at August 31, $27,620. 3. Checks outstanding, $5,290. 4. Deposit in transit, not recorded by bank, $4,250. 5. A check for $170 in payment of an account was erroneously recorded in the check register as $710. 6. Bank debit memo for service charges, $30. 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

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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The following data were accumulated for use in reconciling the bank account of Creative Design Co. for August 20Y6:
1. Cash balance according to the company's records at August 31, $26,070.
2. Cash balance according to the bank statement at August 31, $27,620.
3. Checks outstanding, $5,290.
4. Deposit in transit, not recorded by bank, $4,250.
5. A check for $170 in payment of an account was erroneously recorded in the check register as $710.
6. Bank debit memo for service charges, $30.
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)?
Transcribed Image Text:The following data were accumulated for use in reconciling the bank account of Creative Design Co. for August 20Y6: 1. Cash balance according to the company's records at August 31, $26,070. 2. Cash balance according to the bank statement at August 31, $27,620. 3. Checks outstanding, $5,290. 4. Deposit in transit, not recorded by bank, $4,250. 5. A check for $170 in payment of an account was erroneously recorded in the check register as $710. 6. Bank debit memo for service charges, $30. 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)?
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