(A) Bank Reconciliation

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, $21,810.
2. Cash balance according to the bank statement at August 31, $23,000.
3. Checks outstanding, $4,430.
4. Deposit in transit, not recorded by bank, $3,560.
5. A check for $590 in payment of an account was erroneously recorded in the check register as $950.
6. Bank debit memo for service charges, $40.

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, 2016, what amount should be reported for cash?

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

Required:

(B) Bank Reconciliation and Entries

The cash account for Pala Medical Co. at June 30, 20Y1, indicated a balance of $10,760. The bank statement indicated a balance of $12,130 on June 30, 20Y1. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:

1. Checks outstanding totaled $4,370.
2. A deposit of $4,550, representing receipts of June 30, had been made too late to appear on the bank statement.
3. The bank collected $2,370 on a $2,240 note, including interest of $130.
4. A check for $440 returned with the statement had been incorrectly recorded by Pala Medical Co. as $400. The check was for the payment of an obligation to Skyline Supply Co. for a purchase on account.
5. A check drawn for $80 had been erroneously charged by the bank as $800.
6. Bank service charges for June amounted to $60.

Required:

1. Prepare a bank reconciliation.

2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. For a compound transaction, if an amount box does not require an entry, leave it blank.

3. If a balance sheet were prepared for Pala Medical Co. on June 30, 20Y1, what amount should be reported as cash?

Bank Reconciliation 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, $21,810. 2. Cash balance according to the bank statement at August 31, $23,000. 3. Checks outstanding, $4,430. 4. Deposit in transit, not recorded by bank, $3,560. 5. A check for $590 in payment of an account was erroneously recorded in the check register as $950. 6. Bank debit memo for service charges, $40. a. Prepare a bank reconciliation, using the format shown in Exhibit 13. Creative Design Co. Bank Reconciliation August 31, 2016 Cash balance according to bank statement Adjustments: Total adjustments Adjusted balance Cash balance according to company's records Adjustments: Total adjustments Adjusted balance b. If the balance sheet were prepared for Creative Design Co. on August 31, 2016, what amount should be reported for cash? c. Must a bank reconciliation always balance (reconcile)? 1. Prepare a bank reconciliation. Pala Medical Co. Bank Reconciliation June 30, 2011 Cash balance according to bank statement Adjustments: Total adjustments Adjusted balance Cash balance according to company's records Adjustments: Total adjustments Adjusted balance 2. Journalize the necessary entries (a.) that increase cash and (b.) that decrease cash. The accounts have not been closed. For a compound transaction, if an amount box does not require an entry, leave it blank. a. 20Y1 June 30 b. June 30 3. If a balance sheet were prepared for Pala Medical Co. on June 30, 20Y1, what amount should be reported as cash