The following data were accumulated for use in reconciling the bank account of Nakajima Co. for July:

1. Cash balance according to the company's records at July 31, $21,000.
2. Cash balance according to the bank statement at July 31, $22,140.
3. Checks outstanding, $4,260.
4. Deposit in transit, not recorded by bank, $3,420.
5. A check for $590 issued in payment of an account was erroneously recorded in the check register as $950.
6. Bank debit memo for service charges, $60.

a. Prepare a bank reconciliation, using the format shown in Exhibit 12.

Nakajima Co.
Bank Reconciliation
July 31
Cash balance according to bank statement	$fill in the blank 6544cbfef001026_1
Adjusted balance
Cash balance according to company's records
Adjusted balance

b. If the balance sheet is prepared for Nakajima Co. on July 31, what amount should be reported for cash?

c. Must a bank reconciliation always balance (reconcile)?