Bank reconciliation

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 company's records at August 31, $25,120.
2. Cash balance according to the bank statement at August 31, $26,520.
3. Checks outstanding, $5,100.
4. Deposit in transit not recorded by bank, $4,090.
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, $60.

Question Content Area

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	$Cash balance according to bank statement
Add: Bank service chargeAdd: Deposit in transit on August 31Add: Error in recording checkAdd: Outstanding checks	- Select -
Deduct: Bank service chargeDeduct: Deposit in transit on August 31Deduct: Error in recording checkDeduct: Outstanding checks	- Select -
Adjusted balance	$Adjusted balance
Cash balance according to company's records	$Cash balance according to company's records
Add: Bank service chargeAdd: Deposit in transit on August 31Add: Error in recording checkAdd: Outstanding checks	- Select -
Deduct: Bank service chargeDeduct: Deposit in transit on August 31Deduct: Error in recording checkDeduct: Outstanding checks	- Select -
Adjusted balance	$Adjusted balance

Question Content Area

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