Prepare a bank reconciliation for Vartan’s Coffee Shop at April 30 using the following information:

Balance per USA Bank statement at April 30 ..... $9,547.21

Outstanding checks ................4,815.68

NSF checks from customer .............2,651.77

Deposits in transit ................6,972.89

Interest revenue .................. 305.77

Service charge.................. 75.00

Cash balance per Vartan’s records at April 30..... 14,125.42

Enter adjustments into the accounting equation needed to update the company’s cash balance. What is the net effect on net income?

Will net income be increased or decreased? By what amount?