The following data were accumulated for use in reconciling the bank account of M

Question

The following data were accumulated for use in reconciling the bank account of Mathers Co. for July: 1. Cash balance according to the company's records at July 31 $21,180. 2. Cash balance according to the bank statement at July 31, $22,360. 3. Checks outstanding, $4,300. 4. Deposit in transit, not recorded by bank, $3,450. 5. A check for $480 in payment of an account was erroneously recorded in the check register as $840. 6. Bank debit memo for service charges, $30. a. Prepare a bank reconciliation, using the format shown in Exhibit 14

Explanation / Answer

Solution a:

Solution b:

Amount of cash that should be reported in balance sheet on July 31 = $21,510

Solution c:

True, bank reconciliation always balance.

Mathers Co Bank Reconciliation July'31 Cash balance according to bank statement $22,360.00 Add: Outstanding deposits $3,450.00 Deduct: outstanding checks $4,300.00 Adjusted balance $21,510.00 Cash balance according to company’s records $21,180.00 Add: Incorrect check recording $360.00 Less: Bank service charge $30.00 Adjusted balance $21,510.00

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