27th Edition
WARREN + 5 others
ISBN: 9781337272094




27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

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 $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 August 31 $ 7,200 $27,525
Bank service charges 25 7,225
Cash balance according to bank statement $20,300
  1. a. From the data in this bank reconciliation, prepare a new bank reconciliation for Chesner Co., using the format shown in the illustrative problem.
  2. b. If a balance sheet is prepared for Chesner Co. on August 31, what amount should be reported for cash?


To determine

Bank Reconciliation Statement: Bank statement is prepared by bank. The company maintains its own records from its perspective. This is why the cash balance per bank and cash balance per books seldom agree. Bank reconciliation is the statement prepared by company to remove the differences and disagreement between cash balance per bank and cash balance per books.

To determine: The adjusted balance on the bank reconciliation and journal entry for bank reconciliation.


Prepare bank reconciliation statement of Company C.

Company C

Bank Reconciliation

August 31

Particulars Amount ($) Amount ($)
Cash balance according to bank statement 20,300
Add: Deposits in Transit on August 31 7,200
Deduct: Outstanding checks 3,585


To determine

To provide: the amount reported for cash.

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