Bank Reconciliation and Entries The cash account for Deaver Consulting at October 31, 20Y6, indicated a balance of $10,075. The bank statement indicated a balance of $12,810 on October 31,20Y6. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items: a. Checks outstanding totaled $4,610. b. A deposit of $4,800, representing receipts from October 31 , had been made too late to appear on the bank statement. . The bank had collected $2,500 on a note left for collection. The face of the note was $2,370. d. A check for $550 returned with the statement had been incorrectly recorded by Deaver Consulting as $500. The check was for the payment of an obligation to Oxford Office Supplies Co. for the purchase of office supplies on account. e. A check drawn for $550 had been incorrectly charged by the bank as $50. f. Bank service charges for October amounted to $25. Instructions: 1. Prepare a bank reconciliation. Feedback Check My Work 1. A bank reconciliation is usually divided into two sections: one for the company cash account section and the other for the bank balance section. Determine the effect of the data on each section. Recall that when you are finished, the adjusted balances in the bank and company sections of the bank reconciliation must be equal. If not, an item must have been overlooked or treated incorrectly. 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. Increases to Cash: 2. Illustrate the effects on the accounts and financial statements of the bank econciliation. 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. Increases to Cash: Financial Statement Effects Balance Sheet Income Statement Interest revenue Decreases to Cash: Financial Statement Effects Feedback Theck My Work 2. Keep in mind that the company needs to adjust any items in the company section of the bank reconciliation because these have not been previously recorded by the company. Debit memo items like bank service charges decrease Cash. Items that come from credit memos like collections of notes or interest by the bank increase Cash. If the company made an error that overstates or understates cash in the company section, then the journal adjustment would decrease Cash or increase Cash, respectively