Owen Company's unadjusted book balance at June 30 is $12,500. The company's bank statement reveals bank service charges of $95. Two credit memos are included in the bank statement: one for $1,290, which represents a collection that the bank made for Owen, and one for $150, which represents the amount of interest that Owen had earned on its interest-bearing account in June. What is the true cash balance?

1. $12,500

2. $13,845

3. $13,640

4. $14,035