![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjcQ7VeQ6uG2RgVaFRYvn-3zLrsqzc4pYiihfDpXADnKH3iR637eyMC1cND2KaLHkI4XbwAFCVHQWHu7Hs2FjE0HkZqji1kwoH4WoZJ6NeMSJsHWbWfjcwBYGIuR3jqkJL44JYRBgc_GKNh/s400/EX+8-21.png)
Chesner Co.
Bank Reconciliation
July 31, 2014
Cash balance according to company’s records . . . . . . . . . . . . . . . . . . . . . . . $11,100
Add: Outstanding checks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,585
Error by Chesner Co. in recording Check
No. 1056 as $950 instead of $590 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360
Note for $12,000 collected by bank, including interest . . . . . . . . . . . 12,480 16,425
$27,525
Deduct: Deposit in transit on July 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,200
Bank service charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 7,225
Cash balance according to bank statement . . . . . . . . . . . . . . . . . . . . . . . . . . $20,300
a. From the data in the above bank reconciliation, prepare a new bank reconciliation for Chesner Co., using the format shown in the illustrative problem.
b. If a balance sheet were prepared for Chesner Co. on July 31, 2014, what amount should be reported for cash?
Answer:
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjiQdlRq-bccxzA-kghwLbOjW4n_RW5w5lZx7JvnUbMszJl0l1HkBEADQXhSFR-LAXTKNqRKqn5T2388DZU4b5qnXTjVaEIJSy6sPppfy2BVCVhRLMQ39H3V3guTKjGdrEVAotvVQI0o_EJ/s400/Ex.+8%25E2%2580%259321.png)
a.
CHESNER CO.
Bank Reconciliation
July 31, 2014
Cash balance according to bank statement $20,300
Add: Deposit in transit on July 31 7,200
$27,500
Deduct: Outstanding checks 3,585
Adjusted balance $23,915
Cash balance according to company’s records $11,100
Add: Error in recording Check No. 1056 as $950
instead of $590 $ 360
Note for $12,000 collected by bank, including
interest 12,480 12,840
$23,940
Deduct: Bank service charges 25
Adjusted balance $23,915
b. $23,915
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