Directions:

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 companys records at August 31, $24,556.
2.	Cash balance according to the bank statement at August 31, $31,856.
3.	Checks outstanding, $13,280.
4.	Deposit in transit, not recorded by bank, $6,392.
5.	A check for $48 in payment of an account was erroneously recorded in the check register as $480.
6.	Bank debit memo for service charges, $20.

A.	Prepare a bank reconciliation, using the format shown in Exhibit 13 . Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
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)?

Amount Descriptions
Adjusted balance
Bank service charge
Bank error in charging check as $48 instead of $480
Bank error in charging check as $480 instead of $48
Deposit in transit, not recorded by bank
Error in recording check as $48 instead of $480
Error in recording check as $480 instead of $48
Outstanding checks
Total adjustments

Bank Reconciliation

A. Prepare a bank reconciliation, using the format shown in

Exhibit 13

. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Creative Design Co.

Bank Reconciliation

August 31, 20Y6

1	Cash balance according to bank statement.
2	Adjustments:
3
4
5
6
7
8	Cash balance according to companys records
9	Adjustments:
10
11
12
13

B. If the balance sheet were prepared for Creative Design Co. on August 31 what amount should be reported for cash?