Poway Co.
Bank Reconciliation
For the Month Ended June 30, 2014
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
Answer:
1. The heading should be “June 30, 2014,” and not “For the Month Ended June 30, 2014.”
2. The outstanding checks should be deducted from the balance per bank.
3. The deposit of June 30, not recorded by the bank, should be added to the balance per bank.
4. Service charges should be deducted from the balance per company’s records.
5. The error in recording the June 17 deposit of $7,150 as $1,750 should be added to the balance per company’s records.
A correct bank reconciliation would be as follows:
POWAY CO.
Bank Reconciliation
June 30, 2014
Cash balance according to bank statement $16,185
Add deposit of June 30, not recorded
by bank 6,600
$22,785
Deduct outstanding checks:
No. 1067 $ 575
1106 470
1110 1,050
1113 910 3,005
Adjusted balance $19,780
Cash balance according to company’s records $ 8,985
Add: Proceeds of note collected by bank:
Principal $6,000
Interest 300 $6,300
Error in recording June 17
deposit as $1,750 instead of $7,150 5,400 11,700
$20,685
Deduct: Check returned because
of insufficient funds $ 890
Service charges 15 905
Adjusted balance $19,780