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 $19,850.Cash balance according to the bank statement at July 31, $20,970.Checks outstanding, $4,030.Deposit in transit, not recorded by bank, $3,240.A check for $590 in payment of an account was erroneously recorded in the check register as $950.Bank debit memo for service charges, $30.a. Prepare a bank reconciliation, using the format shown in Exhibit 14.Mathers Co.Bank ReconciliationJuly 31Cash balance according to bank statement$ Adjusted balance$Cash balance according to company's records$ Adjusted balance$b. If the balance sheet is prepared for Mathers Co. on July 31, what amount should be reported for cash?$c. Must a bank reconciliation always balance (reconcile)?

It is a statement which reconciles or tallies the balance as per bank records and balance as the…

Answered: The following data were accumulated for…

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 $19,850.
Cash balance according to the bank statement at July 31, $20,970.
Checks outstanding, $4,030.
Deposit in transit, not recorded by bank, $3,240.
A check for $590 in payment of an account was erroneously recorded in the check register as $950.
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	$

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

c. Must a bank reconciliation always balance (reconcile)?

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