Reference no: EM132752835

Problem - 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, $42,920.

2. Cash balance according to the bank statement at August 31, $56,300.

3. Checks outstanding, $25,390.

4. Deposit in transit not recorded by bank, $13,325.

5. A check for $150 in payment of an account was erroneously recorded in the check register as $1,500.

6. Bank debit memo for service charges, $35.

Required -

a. Prepare a bank reconciliation?

b. If the balance sheet were prepared for Creative Design Co. on August 31, what amount should be reported for cash?

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