Rick Hall owns a card shop, Hall’s Cards. The following cash information is available for the month of August 2016. As of August 31, the bank statement shows a balance of $16,140. The August 31 unadjusted balance in the Cash account of Hall’s Cards is $14,100. A review of the bank statement revealed the following information:

1. A deposit of $4,150 on August 31, 2016, does not appear on the August bank statement.

2. It was discovered that a check to pay for baseball cards was correctly written and paid by the bank for $4,500 but was recorded on the books as $5,400.

3. When checks written during the month were compared with those paid by the bank, three checks amounting to $5,370 were found to be outstanding.

4. A debit memo for $80 was included in the bank statement for the purchase of a new supply of checks.

Required

a. Prepare a bank reconciliation at the end of August showing the true cash balance.

b. Prepare any necessary journal entries to adjust the books to the true cash balance.