he 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, $32,110. Cash balance according to the bank statement at July 31, $31,350. Checks outstanding, $2,870. Deposit in transit, not recorded by bank, $4,150. A check for $170 in payment of an account was erroneously recorded in the check register as $710. Bank debit memo for service charges, $20. a. Prepare a bank reconciliation, using the format shown in Exhibit 14. Mathers Co. Bank Reconciliation July 31 Cash balance according to bank statement $ Add deposit in transit, not recorded by bank Deduct outstanding checks Adjusted balance $ Cash balance according to company's records $ Add error in recording check as $710 instead of $170 Deduct bank service charge Adjusted balance $ Feedback a. Set up two columns: one for the company cash account section and the other for the bank balance section. Determine the effect of the data on each column. Recall that when you are finished, the adjusted balances in the bank and company sections of the reconciliation must be equal. If not, an item has been overlooked or treated in error. b. If the balance sheet is prepared for Mathers Co. on July 31, what amount should be reported for cash?

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter8: Sarbanes-oxley, Internal Control, And Cash

Section: Chapter Questions

Problem 18E

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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, $32,110.
Cash balance according to the bank statement at July 31, $31,350.
Checks outstanding, $2,870.
Deposit in transit, not recorded by bank, $4,150.
A check for $170 in payment of an account was erroneously recorded in the check register as $710.
Bank debit memo for service charges, $20.

a. Prepare a bank reconciliation, using the format shown in Exhibit 14.

Mathers Co.
Bank Reconciliation
July 31
Cash balance according to bank statement	$
Add deposit in transit, not recorded by bank
Deduct outstanding checks
Adjusted balance	$
Cash balance according to company's records	$
Add error in recording check as $710 instead of $170
Deduct bank service charge
Adjusted balance	$

Feedback

a. Set up two columns: one for the company cash account section and the other for the bank balance section. Determine the effect of the data on each column. Recall that when you are finished, the adjusted balances in the bank and company sections of the reconciliation must be equal. If not, an item has been overlooked or treated in error.

b. If the balance sheet is prepared for Mathers Co. on July 31, what amount should be reported for cash?
$

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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