The following bank reconciliation was prepared as of June 30, 20Y7: Line Item Description Amount Amount Cash balance according to bank statement $15,915 Add: Outstanding Check No. 1067 $565 Outstanding Check No. 1106 450 Outstanding Check No. 1110 1,090 Outstanding Check No. 1113 950 Total additions 3,055 Deduct: Deposit of June 30 not recorded by bank (6,900) Adjusted balance $12,070 Cash balance according to company’s records $8,070 Add: Proceeds of note collected by bank: Face value $6,000 Proceeds of note collected by bank: Interest 300 Service charges 10 Total additions 6,310 Deduct: Check returned because of insufficient funds $900 Error in recording June 17 deposit of $8,150 as $1,850 6,300 Total deductions (7,200) Adjusted balance $7,180 a. Identify the errors in the following bank reconciliation: Item Correct Heading Outstanding checks Deposit of June 30 Service charges Error in June 17 deposit Adjusted balance per the bank b. Prepare a corrected bank reconciliation. Poway Co. Bank Reconciliation June 30, 20Y7 Line Item Description Amount Amount Cash balance according to bank statement $ $ $ $ $ $ Total deductions $ Adjusted balance $ Cash balance according to company's records $ $ $ Total additions $ $ $ Total deductions $ Adjusted balance $

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following bank reconciliation was prepared as of June 30, 20Y7:

Line Item Description	Amount	Amount
Cash balance according to bank statement		$15,915
Add: Outstanding Check No. 1067	$565
Outstanding Check No. 1106	450
Outstanding Check No. 1110	1,090
Outstanding Check No. 1113	950
Total additions		3,055
Deduct: Deposit of June 30 not recorded by bank		(6,900)
Adjusted balance		$12,070
Cash balance according to company’s records		$8,070
Add: Proceeds of note collected by bank: Face value	$6,000
Proceeds of note collected by bank: Interest	300
Service charges	10
Total additions		6,310
Deduct: Check returned because of insufficient funds	$900
Error in recording June 17 deposit of $8,150 as $1,850	6,300
Total deductions		(7,200)
Adjusted balance		$7,180

a. Identify the errors in the following bank reconciliation:

Item	Correct
Heading
Outstanding checks
Deposit of June 30
Service charges
Error in June 17 deposit
Adjusted balance per the bank

b. Prepare a corrected bank reconciliation.

Poway Co. Bank Reconciliation June 30, 20Y7

Line Item Description	Amount	Amount
Cash balance according to bank statement		$
		$
	$
	$
	$
	$
Total deductions		$
Adjusted balance		$
Cash balance according to company's records		$
	$
	$
Total additions		$
	$
	$
Total deductions		$
Adjusted balance		$

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