Bank reconciliationAdjusted balance: $44,235The following data were accumulated for use in reconciling the bank account of Creative Design Co. for August 2016:1. Cash balance according to the company's records at August 31,$42,920. 2. Cash balance according to the bank statement at August 31, $56,300.3. Checks outstanding, $25,390.4. Deposit in transit not recorded by bank, $13,325. 5. A check for $150 in payment of an account was erroneously recordedin the check register as $1,500.6. Bank debit memo for service charges, $35. 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)?

Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter8: Sarbanes-oxley, Internal Control, And Cash
Section: Chapter Questions
Problem 18E
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Bank reconciliation
Adjusted balance: $44,235
The following data were accumulated for use in reconciling the bank

account of Creative Design Co. for August 2016:
1. Cash balance according to the company's records at August 31,
$42,920.

2. Cash balance according to the bank statement at August 31, $56,300.
3. Checks outstanding, $25,390.
4. Deposit in transit not recorded by bank, $13,325.

5. A check for $150 in payment of an account was erroneously recorded
in the check register as $1,500.
6. Bank debit memo for service charges, $35.

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)?

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