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, $20,410.
2. Cash balance according to the bank statement at July 31, $21,550.
3. Checks outstanding, $4,140.
4. Deposit in transit, not recorded by bank, $3,330.
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, $30.

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

   Nakajima Co. Bank Reconciliation July 31

   Cash balance according to bank statement
   Add bank service chargeAdd deposit in transit, not recorded by bankAdd error in recording check $950 instead of $590Add outstanding checksDeduct deposit in transit, not recorded by bank
   Add error in recording checkDeduct bank service chargeDeduct deposit in transit, not recorded by bankDeduct error in recording checkDeduct outstanding checks
   Adjusted balance
   Cash balance according to company's records
   Add bank service chargeAdd deposit in transit, not recorded by bankAdd error in recording check $950 instead of $590Add outstanding checksDeduct deposit in transit, not recorded by bank
   Add outstanding checksDeduct bank service chargeDeduct deposit in transit, not recorded by bankDedcut error in recording checkDeduct outstanding checks
   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)?

   YesNo