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:
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
