Bank ReconciliationThe 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, $23,680.2. Cash balance according to the bank statement at August 31, $24,660.3. Checks outstanding, $4,810.4. Deposit in transit, not recorded by bank, $3,860.5. A check for $340 in payment of an account was erroneously recorded in the check register as $430.6. Bank debit memo for service charges, $60. a. Prepare a bank reconciliation, using the format shown in Exhibit 13.Creative Design Co.Bank ReconciliationAugust 31, 20Y6Cash balance according to bank statement2$23,680Add: Deposit in transit on August 31 v3,860Deduct: Outstanding checks v4,810Adjusted balance22,730XCash balance according to company's recordsAdd: Error in recording check vDeduct: Bank service charge vXAdjusted balance$4b. If the balance sheet were prepared for Creative Design Co. on August 31, what amount should be reported for cash?$c. Must a bank reconciliation always balance (reconcile)?

Answered: Image /qna-images/answer/55ec6fd2-a01c-4e41-82ad-f068c088b010.jpg

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, $23,680. 2. Cash balance according to the bank statement at August 31, $24,660. 3. Checks outstanding, $4,810. 4. Deposit in transit, not recorded by bank, $3,860. 5. A check for $340 in payment of an account was erroneously recorded in the check register as $430. 6. Bank debit memo for service charges, $60.

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, $23,680. 2. Cash balance according to the bank statement at August 31, $24,660. 3. Checks outstanding, $4,810. 4. Deposit in transit, not recorded by bank, $3,860. 5. A check for $340 in payment of an account was erroneously recorded in the check register as $430. 6. Bank debit memo for service charges, $60.

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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