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 $19,590. 2. Cash balance according to the bank statement at July 31, $20,420. 3. Checks outstanding, $3,980. 4. Deposit in transit, not recorded by bank, $3,190. 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?

Answer 1

Particular	amount
Cash balance according to bank statement	20420
Less: check o/s.	(3980)
Add : deposit in transit	3190
Less: wrong debit in account(430-340)	(90)
Add: service charges debited	50
Adjusted balance	$19590

Particular	amount
Cash balance according to company records	19590
Add : check o/s	3980
Less : deposit in transit	(3190)
Add: wrong debit in account(430-340)	90
Less: service charges debited	(50)
Adjusted balance	$20420

B) $19,590 should be recorded in balance sheet at july31

C) if there is difference it must always balance.

But they are chances that some times they may not have any difference. In that case no need to prepare reconciliation.