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, $20,870.
2. Cash balance according to the bank statement at August 31, $37,600.
3. Checks outstanding, $23,375.
4. Deposit in transit not recorded by bank, $7,500.
5. A check for $100 in payment of an account was erroneously recorded in the check register as $1,000.
6. Bank debit memo for service charges, $45.
a. Prepare a bank reconciliation, using the format shown in Exhibit 13.
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)?
Exhibit 13: Bank Reconciliation for Power Networking

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Power Networking Bank Reconciliation July 31, 20Y5 Step1Cash balance according to bank statement $3,359.78 Adjustments: Deposit in transit on July 31 Outstanding Check No. 812 Outstanding Check No. 878 Outstanding Check No. 883 Step 2 Step 3 (1,061.00) (435.39) (48.60) Total adjustments (728.79) $2,630.99 Step 4Adjusted balance Step 5Cash balance according to Power Networking Step 6 $2,549.99 Adjustments: Note and interest collected by bank Check returned because of insufficient funds . ......._.__ _ . . . Bank service charge Error in recording Check No. 879 Step 9 (300.00) (18.00) (9.00) Step 7 Total adjustments 81.00 Step 8Adjusted balance $2,630.99