BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

Solutions

Chapter
Section
BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Bank reconciliation

The following data were accumulated for use in reconciling the bank account of Mathers Co. for July:

  1. 1. Cash balance according to the company’s records at July 31, $32,110.
  2. 2. Cash balance according to the bank statement at July 31, $31,350.
  3. 3. Checks outstanding, $2,870.
  4. 4. Deposit in transit, not recorded by bank, $4,150.
  5. 5. A check for $l70 in payment of an account was erroneously recorded in the check register as $710.
  6. 6. Bank debit memo for service charges, $20.
  7. a. Prepare a bank reconciliation, using the format shown in Exhibit 13.
  8. b. If the balance sheet is prepared for Mathers Co. on July 31, what amount should be reported for cash?
  9. c. Must a bank reconciliation always balance (reconcile)?

To determine

A.

Bank Reconciliation Statement: Bank statement is prepared by bank. The company maintains its own records from its perspective. This is why the cash balance per bank and cash balance per books seldom agree. Bank reconciliation is the statement prepared by company to remove the differences and disagreement between cash balance per bank and cash balance per books.

To prepare: Bank reconciliation of M Co.

Explanation

In order to prepare bank reconciliation statement, follow the below format:

Bank section of bank reconciliation statement

Step 1: Enter the cash balance according to bank.

Step 2: Add deposits not recorded by the bank.

Step 3: All the outstanding checks that have not been paid by the bank need to be deducted.

Step 4: Adjusted balance is determined by adding the total adjustments and adding (Subtracting) the total to (from) the cash balance according to bank.

Company section of bank reconciliation statement

Step 5: Enter the cash balance of the company from the ending cash balance in the ledger.

Step 6: Add credit memos that have not been recorded.

Step 7: Subtract debit memos that have not been recorded...

(b)

To determine
The amount of cash to be reported on the balance sheet of M Co.

(c)

To determine

To explain: Whether bank reconciliation needs to always balance.

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What is COSO?

Accounting Information Systems

What is the role of accounting in business?

Financial And Managerial Accounting

AFN EQUATION Carter Corporations sales are expected to increase from 5 million in 2014 to 6 million in 2015, or...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)