Bank Reconciliation

The following data were accumulated for use in reconciling thebank account of Creative Design Co. for August 20Y6:

1. Cash balance according to the company's records at August 31,$14,900.
2. Cash balance according to the bank statement at August 31,$15,900.
3. Checks outstanding, $3,020.
4. Deposit in transit, not recorded by bank, $2,430.
5. A check for $270 in payment of an account was erroneouslyrecorded in the check register as $720.
6. Bank debit memo for service charges, $40.

a. Prepare a bank reconciliation, using theformat shown in Exhibit 13.

Creative Design Co.
Bank Reconciliation
August 31, 20Y6
Cash balance according to bank statement		$
Add: Deposit in transit on August 31
Deduct: Outstanding checks
Adjusted balance		$
Cash balance according to company's records		$
Add: Error in recording check
Deduct: Bank service charge
Adjusted balance		$

b. If the balance sheet were prepared forCreative Design Co. on August 31, what amount should be reportedfor cash?
$

c. Must a bank reconciliation always balance(reconcile)?

Entries for Bank Reconciliation

The following data were accumulated for use in reconciling thebank account of Creative Design Co. for August 20Y6:

1. Cash balance according to the company's records at August 31,$22,100.
2. Cash balance according to the bank statement at August 31,$23,310.
3. Checks outstanding, $4,490.
4. Deposit in transit not recorded by bank, $3,600.
5. A check for $480 in payment of an account was erroneouslyrecorded in the check register as $840.
6. Bank debit memo for service charges, $40.

Journalize the entries that should be made by the company that(a) increase cash and (b) decrease cash.

a. 20Y6 Aug. 31	Cash
	Accounts Payable
b. Aug. 31	Miscellaneous Expense
	Cash