Given Data P08-4A:
CLARK COMPANY Cash balance $26,193 Bank statement balance 28,020 Outstanding checks: No. 3031 1,380 No. 3040 (returned with July statement) 552 No. 3065 336 No. 3069 2,148 Check No. 3056 (rent pmt.): Amount entered in books 1,230 Actual amount 1,250 Clark note collection: Total collected by bank 9,000 Collection fee charged 45 Jim Shaw check: Amount of NSF check 795 NSF charge by bank 10 Bank service charge 15 Deposit not yet credited by bank 10,152
Additional information for analysis:
(a) Unadjusted cash account balance $26,193 Reported unadjusted cash account balance 26,139
(b) Note collection is added to bank statement cash balance on reconciliation ($9,000 less $45 collection fee)
(1) Reconciled balance $34,308
(2) Credit Note Receivable 9,000
1. Prepare Bank reconciliation
2. For each of the following errors, explain the effect on (i) the adjusted bank statement cash balance and (ii) the adjusted cash account book balance.
a. Unadjusted cash balance of $26,193 is listed on reconciliation as $26,139.
b. Collection of $9,000 note less $45 collection fee is added to bank statement cash balance on reconciliation.