Aragon Company has just received the August 31, 2010, bank statement, which is summarized below.

County National Bank Disbursements Receipts Balance

Balance, August 1 $ 9,369

Deposits during August $32,200 41,569

Note collected for depositor, including $40 interest 1,040 42,609

Checks cleared during August $34,500 8,109

Bank service charges 20 8,089

Balance, August 31 8,089

The general ledger Cash account contained the following entries for the month of August.

Cash

Balance, August 1 10,050 Disbursements in August 35,403

Receipts during August 35,000

Deposits in transit at August 31 are $3,800, and checks outstanding at August 31 total $1,550. Cash on hand at August 31 is $310. The bookkeeper improperly entered one check in the books at $146.50 which was written for $164.50 for supplies (expense); it cleared the bank during the month of August.

Instructions

(a) Prepare a bank reconciliation dated August 31, 2010, proceeding to a correct balance.

(b) Prepare any entries necessary to make the books correct and complete.

(c) What amount of cash should be reported in the August 31 balance sheet?