1. 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 $28,850.
   2. Cash balance according to the bank statement at July 31, $30,060.
   3. Checks outstanding, $5,860.
   4. Deposit in transit, not recorded by bank, $4,700.
   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, $40.

   a. Prepare a bank reconciliation, using the format shown in Exhibit 14.

   Mathers Co.
   Bank Reconciliation
   July 31
   Cash balance according to bank statement	$
   Add deposit in transit, not recorded by bank
   Deduct outstanding checks
   Adjusted balance	$
   Cash balance according to company's records	$
   Add error in recording check $430 instead of $340
   Deduct bank service charge
   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)? Yes