Bank Reconciliation and Entries

The cash account for Deaver Consulting at October 31, 20Y6, indicated a balance of $9,245. The bank statement indicated a balance of $12,110 on October 31, 20Y6. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:

1. Checks outstanding totaled $4,360.
2. A deposit of $4,540, representing receipts from October 31, had been made too late to appear on the bank statement.
3. The bank had collected $2,360 on a note left for collection. The face of the note was $2,240.
4. A check for $880 returned with the statement had been incorrectly recorded by Deaver Consulting as $800. The check was for the payment of an obligation to Oxford Office Supplies Co. for the purchase of office supplies on account.
5. A check drawn for $850 had been incorrectly charged by the bank as $50.
6. Bank service charges for October amounted to $35.

2. Illustrate the effects on the accounts and financial statements of the bank reconciliation. If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.

1. Prepare a bank reconciliation. Deaver Consulting Bank Reconciliation October 31, 2046 Cash balance according to bank statement Add: Deposit of October 31, not recorded by bank Accounting numeric Deduct: Outstanding checks $ Deduct: Bank error in charging check as $50 instead of $850 Adjusted balance Cash balance according to Deaver Consulting Add: Proceeds of note collected by bank, including $120 interest Deduct: Error in recording check by the company as $800 instead of $880 Deduct: Bank service charges di Adjusted balance Increases to Cash: Balance Sheet Assets Liabilities + Stockholders' Equity Cash + Notes Receivable No Effect + Retained Earnings Oct. 31 Statement of Cash Flows Income Statement Operating Interest revenue Decreases to Cash: Balance Sheet Assets Liabilities + Stockholders' Equity Cash + No Effect Accounts Payable + Retained Earnings Oct. 31 Statement of Cash Flows Income Statement Operating Miscellaneous administrative expense