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, $24,403. 2. Cash balance according to the bank statement at July 31, $31,504. 3. Checks outstanding, $13,345. 4. Deposit in transit, not recorded by bank, $6,727. 5. A check for $55 in payment of an account was erroneously recorded in the check register as $550. 6. Bank debit memo for service charges, $12. Journalize the entry or entries that should be made by the company. Refer to the Chart of Accounts for exact wording of account titles.

Explanation / Answer

5. Cash in Bank 495

Accounts payable 495

(550-55)

6. Bank charges 12

Cash 12

Bank Reconcilation statement

Cash balance as per book records $24,403

ADD: Error $495

Less: Bank debit memo $12

Adjusted book balance $24,886

Cash balance as per bank $31,504

Add: Deposit in transit $6,727

Less: Check outstanding $13,345

Adjusted bank balance $24,886

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