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Bank Reconciliation An accounting clerk for Chesner Co. prepared the following bank reconciliation: Chesner Co. Bank...

Bank Reconciliation

An accounting clerk for Chesner Co. prepared the following bank reconciliation:

Chesner Co.
Bank Reconciliation
August 31
Cash balance according to company's records $6,400
Add: Outstanding checks $3,070
  Error by Chesner Co. in recording Check
    No. 1056 as $940 instead of $490 450
  Note for $10,000 collected by bank, including interest 10,400 13,920
$20,320
Deduct: Deposit in transit on August 31 $6,520
      Bank service charges 30 6,550
Cash balance according to bank statement $13,770

a. From the data in this 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 Muskegon Co. on May 31, 2016, what amount should be reported for cash?

Homework Answers

Answer #1
a
Chesner Co.
Bank Reconciliation
August 31
Cash balance according to bank statement 13770
Add deposit in transit on August 31 6520
Deduct outstanding checks 3070
Adjusted balance 17220
Cash balance according to company's records 6400
Add error in recording Check No. 1056 as $940 instead of $490 450
Add Note for $10,000 collected by bank, including interest 10400 10850
Deduct bank service charges 30
Adjusted balance 17220
b
Amount reported for cash = 17220
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