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 $17,490. 2. Cash balance according to the bank statement at July 31, $18,520. 3. Checks outstanding, $3,550. 4. Deposit in transit, not recorded by bank, $2,850. 5. A check for $590 in payment of an account was erroneously recorded in the check register as $950. 6. 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 $1 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)? EXHIBIT 14 Bank Reconciliation for Power Networking Power Networking Bank Reconciliation July 31, 2045 Step 1 Step 2 Cash balance according to bank statement....... Add deposit of July 31, not recorded by bank... $3,359.78 816.20 Step 3 Deduct outstanding checks: No. 812. ...................... No. 878...... No.883....... .883............................................. Adjusted balance.......... $1,061.00 435.39 48.60 ............ Step 4 1,544.99 $2,630.99 Step 5 Step 6 Cash balance according to Power Networking... Add note and interest collected by bank.... $2,549.99 408.00 Step 9 Step 7 $ 300.00 18.00 Deduct: Check returned because of insufficient funds. Bank service charge ................... Error in recording Check No. 879 ...... Adjusted balance....... 9.00 327.00 $2,630.99 Step 8