Question

The following data were accumulated for use in reconciling the bank account of Mathers Co. for July: Cash balance according to the company's records at July 31 $16,520. Cash balance according to the bank statement at July 31, $17,510. Checks outstanding, $3,350. Deposit in transit, not recorded by bank, $2,690. A check for $480 in payment of an account was erroneously recorded in the check register as $840. Bank debit memo for service charges, $30. a. Prepare a bank reconciliation, using the format shown in Exhibit 14. Mathers Co. Bank Reconciliation July 31 Cash balance according to bank statement $ Adjusted balance $ Cash balance according to company's records $ Adjusted balance $

Answer 1

a. Prepare a bank reconciliation

Bank statement $17,510

+ deposits in transit $2,690

- checks outstanding ($3,350)

Reconciled bank statement $16,850

The cash account reconciliation:

Cash balance $16,520

+ error in recording of check ($840 - $480) = $360

- bank fees = ($30)

Reconciled cash account $16,850

If done properly, both reconciled accounts should be equal.