Bank reconciliation

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

Cash balance according to the company's records at August 31, $15,110.

Cash balance according to the bank statement at August 31, $16,120.

Checks outstanding, $3,070.

Deposit in transit not recorded by bank, $2,460.

A check for $270 in payment of an account was erroneously recorded in the check register as $720.

Bank debit memo for service charges, $50.

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

a. Prepare a bank reconciliation, using the format shown in Exhibit 13.

Creative Design Co. Bank Reconciliation August 31, 20Y6

Line Item Description	Amount
Cash balance according to bank statement	$fill in the blank 2
Add: Bank service chargeAdd: Deposit in transit on August 31Add: Error in recording checkAdd: Outstanding checks	fill in the blank 4
Deduct: Bank service chargeDeduct: Deposit in transit on August 31Deduct: Error in recording checkDeduct: Outstanding checks	fill in the blank 6
Adjusted balance	$fill in the blank 7
Cash balance according to companys records	$fill in the blank 8
Add: Bank service chargeAdd: Deposit in transit on August 31Add: Error in recording checkAdd: Outstanding checks	fill in the blank 10
Deduct: Bank service chargeDeduct: Deposit in transit on August 31Deduct: Error in recording checkDeduct: Outstanding checks	fill in the blank 12
Adjusted balance	$fill in the blank 13

b. If the balance sheet were prepared for Creative Design Co. on August 31, what amount should be reported for cash? fill in the blank 1 of 1$

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

YesNo

step 2

Using bank reconciliation to determine cash receipts stolen

Alaska Impressions Co. records all cash receipts on the basis of its cash register tapes. Alaska Impressions discovered during October 20Y3 that one of its sales clerks had stolen an undetermined amount of cash receipts by taking the daily deposits to the bank. The following data have been gathered for October:

Line Item Description	Amount
Cash in bank according to the general ledger	$11,010
Cash according to the October 31, 20Y3, bank statement	13,410
Outstanding checks as of October 31, 20Y3	4,160
Bank service charge for October	40
Note receivable, including interest collected by bank in October	2,340

No deposits were in transit on October 31.

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

a. Determine the amount of cash receipts stolen by the sales clerk. fill in the blank 1 of 1$

b. What accounting controls would have prevented or detected this theft?

Proper authorization.Separation of duties.Competent personnel.Security measures.None of these choices are correct.