The following data were accumulated for use in reconciling the bank account of Creative Design Co. for August 20Y6:

Cash balance according to the company's records at August 31, $24,900.

Cash balance according to the bank statement at August 31, $26,290.

Checks outstanding, $5,050.

Deposit in transit, not recorded by bank, $4,060.

A check for $270 in payment of an account was erroneously recorded in the check register as $720.

Bank debit memo for service charges, $50.

Question Content Area

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

If the balance sheet were prepared for Creative Design Co. on August 31 , what amount should be reported for cash? Must a bank reconciliation always balance (reconcile)