Answer:
Creative Design Co.
A. Bank Reconciliation Statement as of August 31:
Balance as per bank statement $32,278
Deposit in transit, $7,170
Checks outstanding, ($14,668)
Balance as per adjusted cash bal. $24,780
B. The amount that should be reported for cash is $32,278.
C. B) Yes. A bank reconciliation must always balance (reconcile), otherwise, the purpose of the reconciliation is defeated.
Explanation:
a) Data and Calculations:
1. Cash balance according to the company’s records at August 31, $24,270.
2. Cash balance according to the bank statement at August 31, $32,278
3. Checks outstanding, $14,668
4. Deposit in transit, not recorded by bank, $7,170
5. A check for $58 in payment of an account was erroneously recorded in the check register as $580.
6. Bank debit memo for service charges, $12
Cash Book Adjustment:
August 31 balance $24,270
add overstatement of check 522
less bank charges 12
Adjusted balance $24,780
