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

Chesner Co.
Bank Reconciliation
August 31
Cash balance according to company's records			$6,340
Add: Outstanding checks	$3,040
Error by Chesner Co. in recording Check
No. 1056 as $820 instead of $280	540
Note for $10,000 collected by bank, including interest	10,400		13,980
			$20,320
Deduct: Deposit in transit on August 31	$6,450
Bank service charges	50		6,500
Cash balance according to bank statement			$13,820

a. From the data in this bank reconciliation, prepare a new bank reconciliation for Chesner Co., using the format shown in the illustrative problem.

Chesner Co.
Bank Reconciliation
August 31
Cash balance according to bank statement		$
Add deposit in transit on August 31
Deduct outstanding checks
Adjusted balance		$
Cash balance according to company's records		$
Add error in recording Check No. 1056 as $820 instead of $280	$
Add note for $10,000 collected by bank, including interest
Deduct bank service charges
Adjusted balance		$

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a. Set up two columns: one for the company cash account section and the other for the bank balance section. Determine the effect of the data on each column. Recall that when you are finished, the adjusted balances in the bank and company sections of the reconciliation must be equal. If not, an item has been overlooked or treated in error.

b. If a balance sheet were prepared for Muskegon Co. on May 31, 2016, what amount should be reported for cash? $

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