Bank reconciliation

The following bank reconciliation was prepared as of June $30,20$Y$7$:

Poway Co$.$

Bank Reconciliation

For the Month Ended June $30,20$Y$7$

Line Item Description Amount Amount

Cash balance according to bank statement $$16,130$

Add: Outstanding Check No$.1067$ $$590$

Outstanding Check No$.1106460$

Outstanding Check No$.11101,010$

Outstanding Check No$.1113950$

Total additions $3,010$

Deduct: Deposit of June $30$ not recorded by bank $(6,600)$

Adjusted balance $$12,540$

Cash balance according to company$$s records $$9,840$

Add: Proceeds of note collected by bank: Face value $$6,000$

Proceeds of note collected by bank: Interest $300$

Service charges $20$

Total additions $6,320$

Deduct: Check returned because of insufficient funds $$900$

Error in recording June $17$ deposit of $$7,250$ as $$2,7504,500$

Total deductions $(5,400)$

Adjusted balance $$10,760$

Question Content Area

a$.$

Identify the errors in the following bank reconciliation:

Item Correct

Heading

Should be June $30,20$Y$7$

Outstanding checks

Should be deducted from balance per bank statement

Deposit of June $30$

Should be added to balance per bank statement

Service charges

Should be deducted from balance per company's records

Error in June $17$ deposit

Should be added to balance per company's records

Adjusted balance per the bank

Does not equal the adjusted balance per company

Feedback Area

Feedback

Remember that a bank reconciliation is a record for a specific day rather than a period. Also, keep in mind that deposits in transit are added to the bank statement balance and outstanding checks are subtracted. Items that come from credit memos like collections of notes or interest by the bank are added to the company cash balance and debit memo items like bank service charges and NSF checks are subtracted from the company's cash balance. Errors should be added or deducted from the bank or company section of the reconciliation depending on the nature of the error. If the bank made the error, the bank section would be adjusted. If the company made the error, the company section would be adjusted.

Question Content Area

b$.$ Prepare a corrected bank reconciliation.

Poway Co$.$

Bank Reconciliation

June $30,20$Y$7$

Line Item Description Amount Amount

Cash balance according to bank statement $Cash balance according to bank statement

$7,250$

blank $-$ Select $-$

$$-$ Select $-$

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$-$ Select $-$

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$-$ Select $-$

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$-$ Select $-$

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Total deductions blank Total deductions

Adjusted balance $Adjusted balance

Cash balance according to company's records $Cash balance according to company's records

$$-$ Select $-$

$-$ Select $-$

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Total additions blank Total additions

$$-$ Select $-$

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$-$ Select $-$

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Total deductions blank Total deductions

Adjusted balance $