Exercise 7-11 Preparation of bank reconciliation LOG CHECK FIGURE 1. Adjusted book balance $10,592 The bank reconciliation prepared by Winfield Construction on June 30, 2020, appeared as follows: Winfield Construction Bank Reconciliation June 30, 2020 $ 8,700 Book balance $9,260 Bank statement balance Add Deposit of June 30 in transit 1,300 $10.000 Deduct: Outstanding cheque #14 Adjusted bank balance.... 740 $ 9,260 Adjusted book balance. $9,260 The Cash account in the general ledger appeared as follows on July 31: Cash Debit Acct. No. 101 Balance Date Explanation PR Credit Balance 2020 June 30 July 31 31 CR3 4,672 9,260 13,932 11,023 CD6 2,909 A list of deposits made and cheques written during July, taken from the cash receipts journal and cash disbursements journal, is shown below: Deposits Made Cheques Written July 8 11 No. 52 53 $1,190 1.550 1,339 593 $1.663 894 352 24 54 31 Total July Cash Receipts $4,672 Total July Cash Disbursements $2,909 51 The following bank statement is available for July: L Bank latement To: Winfield Construction Cheques/Charges Deposits Credits July 31, 2020 Bank of Montreal Balance 8,700 9,569 9,096 NSF 07/02 431 #52 #96 07/08 07/11 1.663 391 07/02 1,300 07/08 1,190 07/11 1.550 07/24 1,339 07/31 PMT - Principal Payment 10.255 11,594 11,242 INT = Interest 154 07/31 NSF Not Sufficient Funds 352 SC Service Charge In reviewing cheques returned by the bank, the bookkeeper noted that cheque 196 written by Winburn Construction in the amount of $391 was charged against Winfield's account in error by the bank. The NSF cheque was regarding a customer account, Jim Anderson Required 1. Prepare a bank reconciliation at July 31. 2. Prepare the necessary journal entry to bring the general ledger Cash account into agreement with the adjusted balance on the bank reconciliation Analysis Component of the journal entries in Part 2 were not recorded, what financial statement elements (profit, assets, liabilities, and equity) would be over- or understated