E5-16 Bank reconciliation Identify each of the following reconciling items as: (a) an addition to the cash balance ac- cording to the bank statement, (b) a deduction from the cash balance according to the bank statement, (c) an addition to the cash balance according to the company's records, deduction from the cash balance according to the company's records. (None of the trans- actions reported by bank debit and credit memos have been recorded by the company.) 1. Bank service charges, $36. 2. Check drawn by company for $375 Ibut incorrectly recorded by company as $735 3. Check for $50 incorrectly charged by bank as $500. 4. Check of a customer returned by bank to company because of insufficient funds, $1,200. 5. Deposit in transit, $12,375 (d) a or 6. Outstanding checks, $14,770. 7. Note collected by bank, $10,600. P5-2 Bank reconciliation and entries The cash account for Deaver Consulting at October 31, 20Y6, indicated a balance of $15,750. The bank statement indicated a balance of $31,095 on October 31, 20Y6. Comparing the bank statement and the accompanying canceled checks and memos with the records re- vealed the following reconciling items