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, $20,870. 2. Cash balance according to the bank statement at August 31, $37,600. 3. Checks outstanding, $23,375. 4. Deposit in transit not recorded by bank, $7,500. 5. A check for $100 in payment of an account was erroneously recorded in the check register as $1,000. 6. Bank debit memo for service charges, $45. A. Prepare a bank reconciliation, using the format shown in Exhibit 13. 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) ?

journalize the entry or entries that should be made by the company.

Question

Business

Quinten Christensen

19 October, 18:00

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, $20,870. 2. Cash balance according to the bank statement at August 31, $37,600. 3. Checks outstanding, $23,375. 4. Deposit in transit not recorded by bank, $7,500. 5. A check for $100 in payment of an account was erroneously recorded in the check register as $1,000. 6. Bank debit memo for service charges, $45. A. Prepare a bank reconciliation, using the format shown in Exhibit 13. 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) ?

journalize the entry or entries that should be made by the company.

+4

Answers (1)

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Ferris · Answer 1

The amount should the bank report = $ 21725

Explanation:

Entries:

3. Dr accounts payable 23375

Cr Bank 23375

4. Dr Bank 7500

Cr Account receivable 7500

5. Dr Bank 900

Cr Accounts payable 900

(Error in check)

6. Dr Bank charges 45

Cr Bank 45.

(To record bank charges)

Creative Design co

Bank Reconciliation statement

$

Balance as per bank statement as Aug - 20Y6 = 37600

Adjustment:

Add: Deposit in transit = 7500

Less: Outstanding checks = (23375)

Adjusted balance 21725.

Balance as per Cash book = 20870

Less : Bank charges = (45)

Add: Error in check = 900

Adjusted Balance 21725