On August 31, 2012, the general ledger of The Dean Acting Academy shows a balance for cash of $7,844. Cash receipts yet to be deposited into the checking account total $3,238, and checks written by the academy but not yet processed by the bank total $1,325. The company's balance of cash does not reflect a bank service fee of $25 and interest earned on the checking account of $36. These amounts are included in the balance of cash of $5,942 reported by the bank as of the end of August.
Required:
Prepare a bank reconciliation to calculate the correct ending balance of cash on August 31, 2012.