Question

Bank Reconciliation

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 $22,020.
2. Cash balance according to the bank statement at July 31, $22,940.
3. Checks outstanding, $4,470.
4. Deposit in transit, not recorded by bank, $3,590.
5. A check for $340 in payment of an account was erroneously recorded in the check register as $430.
6. Bank debit memo for service charges, $50.

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)?

Answer 1

Mathers Co a) Particulars Cash as per bank statement Add : Service charges Adjusted bank balance Bank Reconciliation Amount 22940 50 22990 Cash as per book records Add Outstanding Checks Add Wrong recorded check(430 340) Less Cash in transit Adjusted book balance 22020 4470 90 -3590 22990 > In Balance sheet, cash balance is shown as after adjusting bank transaction b) balance of books i.e $ 21970 c) >>Yes, every month bank reconcile is must, every organisation should compare bank statement and company books