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 companys records at August 31, $42,920.
2. Cash balance according to the bank statement at August 31, $56,300.
3. Checks outstanding, $25,390.
4. Deposit in transit not recorded by bank, $13,325.
5. A check for $150 in payment of an account was erroneously recorded in the check register as $1,500.
6. Bank debit memo for service charges, $35.

a. Prepare a bank reconciliation, using the format shown in Exhibit 13.

Creative Design Co.
Bank Reconciliation
August 31, 20Y6
Cash balance according to bank statement		$
Adjusted balance		$
Cash balance according to company's records		$
Adjusted balance		$

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)?