P7.10A (LO 4) AP The bank portion of the bank reconciliation for Maloney Company at October 31, 2021, was as follows: Prepare bank reconciliation and related entries. MALONEY COMPANY Bank Reconciliation October 31, 2021 Cash balance per bank Add: Deposits in transit $11,545 1,530 13,075 Less: Outstanding cheques #2451 #2470 #2471 #2472 #2474 Adjusted cash balance per bank $1,260 920 845 504 1,050 4,579 $ 8,496 The adjusted cash balance per bank agreed with the cash balance per books at October 31. The November bank statement showed the following: MALONEY COMPANY Bank Statement November 30, 2021 Cheques and Other Debits Number Amount Deposits Date Amount $11,545 Oct. 31 Nov. 3 2470 $1,530 12,155 4 2471 11,310 1,212 5 6 2475 2474 2476 920 845 1,641 1,050 2,830 600 7 990 10 2477 13 2,575 10,881 9,831 7,991 7,391 9,966 8,216 8,359 11,325 13,632 1,750 14 18 2479 2480 1,330 21 1,473 2,966 2,567 25 NSF 260 26 2481 695 1,650 27 28 12,937 14,587 16,166 2486 900 EFT 2,479 28 900 EFT 2,479 2486 2483 28 575 1,186 16,166 16,777 14,527 30 LN 2,250 Additional information from the bank statement: 1. The EFT of $2,479 is an electronic transfer from a customer in payment of its account. The amount includes $49 of interest that Maloney Company had not previously accrued. 2. The NSF for $260 is a $245 cheque from a customer, Pendray Holdings, in payment of its account, plus a $15 processing fee. The company's policy is to pass on all NSF service charges to the customer. 3. The LN is a payment of a note payable with the bank and consists of $250 interest and $2,000 principal. 4. At November 30, the cash balance per books was $10,160. The bank did not make any errors. The cash records per books for November follow. Two errors were made by Maloney Company. Cash Payments Date Number Amount Date Nov. 18 Cash Receipts Date Amount Nov. 3 $ 1,212 Nov. 3 $ 612 Amount $1,641 2,380 600 3 20 7 990 21 12 Number 2482 2483 2484 2485 2486 2487 4 6 2,575 2475 2476 2477 2478 2479 2480 2481 538 17 24 26 575 830 975 900 1,200 $14,026 8 20 10 1,750 1,330 695 28 24 14 Total 27 28 1,473 2,699 2,567 1,650 1,186 1,338 $15,690 30 Total Instructions a. Prepare a bank reconciliation at November 30. b. Prepare the necessary adjusting entries at November 30. (Note: The correction of any errors in the recording of cheques should be made to Accounts Payable except for item 3, which should be made to Notes Payable. The correction of any errors in the recording of cash receipts should be made to Accounts Receivable.) Taking It Further When there is an error, how does a company determine if it was a bank error or a company error? How would you know if the bank has made an error in your account