The following data were accumulated tor use in reconiling the bank account of Ze

Question

The following data were accumulated tor use in reconiling 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 reconcilation, using the format shown in Exhibit 13. Reter to the Amount Descriptions list prowided tor the exacr 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 reconcilation always balance (reconcile)?

Explanation / Answer

Solution A:

Solution B:

Cash amount to be reported in Balance Sheet on May 31, 2016 = $24,968

Solution C:

Yes, a bank reconciliation always balance (reconcile).

Zek's Co. Bank Reconciliation Statement May 31,2018 Cash Balance accoding to Bank Statement $31,856.00 Add: Deposit in Transit, not recorded by bank $6,392.00 Less: Outstanding checks $13,280.00 Adjusted Balance $24,968.00 Cash Balance as per company's records $24,556.00 Add: Error in recording check as $480 instead of $48 $432.00 Less: Bank SerVice Charges $20.00 Adjusted Balance $24,968.00

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