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, $18,790.
2. Cash balance according to the bank statement at August 31, $19,580.
3. Checks outstanding, $3,810.
4. Deposit in transit not recorded by bank, $3,060.
5. A check for $340 in payment of an account was erroneously recorded in the check register as $430.
6. Bank debit memo for service charges, $50.

Question Content Area

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

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)?

Yes or No