EX 7-21 Bank reconciliation

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

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

Deduct: Deposit in transit on July 31

$ 7,200

$27,525

Bank service charges

25

Cash balance according to bank statement

7,225

$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?