The bookkeeper for Octagon Flowers discovered the following data for use in reconciling the bank account for July:
a. Cash balance according to the company's records at July 31, $15,600.
b. Cash balance according to the bank statement at July 31, $16,230.
c. Cheques outstanding, $3,180.
d. Deposit in transit, not recorded by bank, $1,950.
e. A $3,500 deposit received by the bank was recorded as $2,500 on the bank statement.
f. A cheque for $270 in payment of Telephone Expense was erroneously recorded in the cheque register as $720.
g. Bank debit memo for service charges, $50.
1. Prepare a bank reconciliation, using the format shown in Exhibit 7.

2. If a balance sheet were prepared for Octagon Flowers on July 31, what amount should be reported for cash?
3. Must a bank reconciliation always balance (reconcile)?

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Power Networking Bank Reconciliation February 28, 2015 Step 1Cash balance according to bank statement Step 2Add deposit of February 28, not recorded by bank $15,679.11 4,769.82 20,448.93 Step 4 Daduct outstanding cheques: No. 774 No. 775 S 416.98 Step 5Adjusted balance 1,236,42 1,653.40 $18,795.53 Step 6Cash balance according to Power Networking Step 8Add error in recording Cheque No. 771 $22,011.94 270.00 22,281.94 Step 11 Step 9Deduct: Cheque returned because of insufficient funds S 357.98 128.43 Bank service charges Loan payment 3,000.00 3486.41 $18,795.53 Step 10Adjusted balance