Identify each of the following reconciling items as: (a) an addition to the cash balance according 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, or (d) a deduction from the cash balance according to the company's records. (None of the transactions reported by bank debit and credit memos have been recorded by the company.) 1. Bank service charges, $90. 2. Check of a customer returned by bank to company because of insufficient funds, $520. 3. Check for $420 incorrectly recorded by the company as $240. 4. Check for $1,440 incorrectly charged by bank as $140. 5. Deposit in transit, $5,310. 6. Outstanding checks, $10,370. 7. Note collected by bank, $12,600. Bank Section EXHIBIT 12 Cash balance according to bank $XXX Bank Reconciliation Add: Debits to cash not on bank statement Format (deposits in transit, etc.) Deduct: Credits to cash not on bank statement $ XXX (outstanding checks, etc.) (XXX) XXX Adjusted balance $XXX Company Section Must be equal. $XXX Cash balance according to company Add: Unrecorded bank credits (notes collected by bank) Deduct: Unrecorded bank debits (NSF checks, $ XXX service charges, etc.) (XXX) XXX $XXX Adjusted balance