(a) Bank Reconciliation Statement : Bank statement is prepared by bank. The company maintains its own records from its perspective. This is why the cash balance per bank and cash balance per books seldom agree. Bank reconciliation is the statement prepared by company to remove the differences and disagreement between cash balance per bank and cash balance per books. To identify: The errors in the bank reconciliation.

Question

Bank Reconciliation The following bank reconciliation was prepared as of June 30, 20Y7: Poway Co. Bank Reconciliation For the Month Ended June 30, 20Y7 Cash balance according to bank statement $16,020 Add: Outstanding Check No. 1067 $590 Outstanding Check No.1106 480 Outstanding Check No.1110 1,000 Outstanding Check No.1113 950 Total additions 3,020 Deduct: Deposit of June 30 not recorded by bank (6,700) Adjusted balance $12,340 Cash balance according to company’s records $9,020 Add: Proceeds of note collected by bank: Face value $5,000 Proceeds of note collected by bank: Interest 250 Service charges 10 Total additions 5,260 Deduct: Check returned because of insufficient funds $860 Error in recording June 17 deposit of $8,150 as $1,850…

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Question

Chapter 7, Problem 7.22EX

To determine

(a)

Bank Reconciliation Statement: Bank statement is prepared by bank. The company maintains its own records from its perspective. This is why the cash balance per bank and cash balance per books seldom agree. Bank reconciliation is the statement prepared by company to remove the differences and disagreement between cash balance per bank and cash balance per books.

To identify: The errors in the bank reconciliation.

(b)

To determine

To prepare: New bank reconciliation for P Co.

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Bank Reconciliation The following bank reconciliation was prepared as of June 30, 20Y7: Poway Co. Bank Reconciliation For the Month Ended June 30, 20Y7 Cash balance according to bank statement $16,020 Add: Outstanding Check No. 1067 $590 Outstanding Check No.1106 480 Outstanding Check No.1110 1,000 Outstanding Check No.1113 950 Total additions 3,020 Deduct: Deposit of June 30 not recorded by bank (6,700) Adjusted balance $12,340 Cash balance according to company’s records $9,020 Add: Proceeds of note collected by bank: Face value $5,000 Proceeds of note collected by bank: Interest 250 Service charges 10 Total additions 5,260 Deduct: Check returned because of insufficient funds $860 Error in recording June 17 deposit of $8,150 as $1,850…

Bank Reconciliation The following June 30 bank reconciliation was prepared for Poway Co. Poway Co. Bank Reconciliation For the Month Ended June 30 Cash balance according to bank statement $16,185 Add outstanding checks: No. 1067 $575 1106 470 1110 1,050 1113 910 3,005 $19,190 Deduct deposit of June 30, not recorded by bank 6,600 Adjusted balance $12,590 Cash balance according to company’s records $8,985 Add: Proceeds of note collected by bank: Principal $6,000 Interest 300 $6,300 Service charges 15 6,315 $15,300 Deduct: Check returned because of insufficient funds $890 Error in recording June 17 deposit of $7,150 as $1,750 5,400 6,290 Adjusted balance $ 9,010 a. Identify the errors in the above bank reconciliation. Item Correct Heading…