The following data were accumulated for use in reconciling the bank account of Z

Question

The following data were accumulated for use in reconciling the bank account of Zek’s Co. for May 2016: 1. Cash balance according to the company’s records at May 31, 2016, $24,556. 2. Cash balance according to the bank statement at May 31, 2016, $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. The word “Deduct:” or “Add:” will automatically appear if it is required. B. If the balance sheet were prepared for Zek’s Co. on May 31, 2016, what amount should be reported for cash? C. Must a bank reconciliation always balance (reconcile)?

Explanation / Answer

what amount should be reported for cash?

Yes, the bank reconciliation must always balance (reconcile) to an adjusted
balance.

bank reconciliation Balance per bank statement 31856 ADD Deposit In transit 6392 6392 Deduct outstanding checks 13280 13280 Adjusted balance 24968 Balance per company’s records 24556 ADD Bank error in charging check as $48 instead
    of $480 432 Deduct sevice Charge 20 Adjusted balance 24968

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