The cash account for Recreational Systems at March 31, 20Y6, indicated a balance of $12,435. The bank statement indicated a balance of $27,150 on March 31, 20Y6. Comparing the bank statement and the accompanying canceled checks and memos with the records reveals the following reconciling items:

a. checks outstanding totaled $9,675

b. a deposit of $4,175, representing receipts of march 31, had been made too late to appear on the bank statement.

c. the bank had collected $8,480 on a note left for collection. The face of the not was $8000

d. A check for $180 returned with the statement had been incorrectly recorded by recreational systems as $810. The check was for the payment of an obligation to Jones Co. for the purchase of office supplies on account.

e. A check drawn for $750 had been incorrectly charged by the bank as $570

f. Bank service charges for March amounted to $75.

Instructions

1. Prepare a bank reconciliation

2. Illustrate the effects on the accounts and financial statements of the bank reconciliation.