EX 8-18 Bank reconciliation
The following data were accumulated for use in reconciling the bank account of Maplewood Co. for July:
1. Cash balance according to the company’s records at July 31, $15,600.
2. Cash balance according to the bank statement at July 31, $16,230.
3. Checks outstanding, $3,180.
4. Deposit in transit, not recorded by bank, $2,950.
5. A check for $270 in payment of an account was erroneously recorded in the check register as $720.
6. Bank debit memo for service charges, $50.
a. Prepare a bank reconciliation, using the format shown in Exhibit 7.
b. If the balance sheet were prepared for Maplewood Co. on July 31, what amount should be reported for cash?
c. Must a bank reconciliation always balance (reconcile)?
Answer:
a. MAPLEWOOD CO. Bank Reconciliation July 31, 20— Cash balance according to bank statement........................... $16,230 Add deposit in transit, not recorded by bank ........................ 2,950 $19,180 Deduct outstanding checks..................................................... 3,180 Adjusted balance...................................................................... $16,000
Cash balance according to company’s records.................... $15,600 Add error in recording check .................................................. 450 $16,050 Deduct bank service charge.................................................... 50 Adjusted balance...................................................................... $16,000
b. $16,000; the adjusted balance from the bank reconciliation should be reported on the July 31 balance sheet for Maplewood Co.
c. Yes, the bank reconciliation must always balance (reconcile) to an adjusted balance.
1. Cash balance according to the company’s records at July 31, $15,600.
2. Cash balance according to the bank statement at July 31, $16,230.
3. Checks outstanding, $3,180.
4. Deposit in transit, not recorded by bank, $2,950.
5. A check for $270 in payment of an account was erroneously recorded in the check register as $720.
6. Bank debit memo for service charges, $50.
a. Prepare a bank reconciliation, using the format shown in Exhibit 7.
b. If the balance sheet were prepared for Maplewood Co. on July 31, what amount should be reported for cash?
c. Must a bank reconciliation always balance (reconcile)?
Answer:
a. MAPLEWOOD CO. Bank Reconciliation July 31, 20— Cash balance according to bank statement........................... $16,230 Add deposit in transit, not recorded by bank ........................ 2,950 $19,180 Deduct outstanding checks..................................................... 3,180 Adjusted balance...................................................................... $16,000
Cash balance according to company’s records.................... $15,600 Add error in recording check .................................................. 450 $16,050 Deduct bank service charge.................................................... 50 Adjusted balance...................................................................... $16,000
b. $16,000; the adjusted balance from the bank reconciliation should be reported on the July 31 balance sheet for Maplewood Co.
c. Yes, the bank reconciliation must always balance (reconcile) to an adjusted balance.
