On October 31, 2024, Crowe Companys general ledger shows a cash account balance of $8,427. The companys cash receipts for the month total $74,520, of which $71,345 has been deposited in the bank. In addition, the company has written checks for $72,497, of which $71,162 has been processed by the bank.

The bank statement reveals an ending balance of $12,457 and includes the following items not yet recorded by Crowe: bank service fees of $250, note receivable collected by the bank of $6,000, and interest earned on the note of $820. After closer inspection, Crowe realizes that the bank incorrectly charged the companys account $700 for an automatic withdrawal that should have been charged to another customers account. The bank agrees to the error.

Required: 1. Prepare a bank reconciliation to calculate the correct ending balance of cash on October 31, 2024. 2. Record the necessary entries to adjust the balance for cash.