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Bank reconciliation

The following data were accumulated for use in reconciling the bank account of Creative Design Co$.$ for August $20$Y$6$:

Cash balance according to the company's records at August $31,$ $$25,840.$

Cash balance according to the bank statement at August $31,$ $$27,380.$

Checks outstanding, $$5,250.$

Deposit in transit not recorded by bank, $$4,210.$

A check for $$170$ in payment of an account was erroneously recorded in the check register as $$710.$

Bank debit memo for service charges, $$40.$

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

Creative Design Co$.$

Bank Reconciliation

August $31,20$Y$6$

Line Item Description Amount

Cash balance according to bank statement $Cash balance according to bank statement

Add: Deposit in transit on August $31$

Add: Deposit in transit on August $31$

Deduct: Outstanding checks

Deduct: Outstanding checks

Adjusted balance $Adjusted balance

Cash balance according to company's records $Cash balance according to company's records

Add: Error in recording check

Add: Error in recording check

Deduct: Bank service charge

Deduct: Bank service charge

$40$

Adjusted balance $Adjusted balance

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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$)?$