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 $22,600.
2. Cash balance according to the bank statement at July 31, $24,000.
3. Checks outstanding, $4,590.
4. Deposit in transit, not recorded by bank, $3,680.
5. A check for $170 in payment of an account was erroneously recorded in the check register as $710.
6. Bank debit memo for service charges, $50.

(a) Prepare a bank reconciliation, using the format shown below.

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 $
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)?

See explanation for all the requirements.

Explanation:

Requirement A

                                Mathers Co.

                        Bank Reconciliation

                                   July 31

Cash balance according to bank statement           $ 24,000

Add: deposit in transit                                                 $3,680

Deduct: outstanding checks                                        (4,590)

Adjusted balance                                                      $23,090

Cash balance according to company's records       $22,600

Add: Error in records payments (710-170)                       $540

Less: Bank charge                                                            ($50)

Adjusted balance                                                       $23,090

Requirement B and C

B. If the balance sheet is prepared for Mathers Co. on July 31, $23,090 should be reported for cash.

C. It is a necessary procedure for a bank and an individual or an organization to adjust the bank balance and book balance to avoid any kind of errors. Therefore, reconciliation is always significant. A bank must always do a reconciliation.

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.