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 companys 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

Question Content Area

a. Identify the errors in the above bank reconciliation.

Item	Correct
Heading	Correct as isShould be For the Month of JuneShould be June 23Should be June 30
Outstanding checks	Correct as isShould be added to balance per company's recordsShould be deducted from balance per bank statementShould be deducted from balance per company's records
Deposit of June 30	Correct as isShould be added to balance per bank statementShould be added to balance per company's recordsShould be deducted from balance per company's records
Service charges	Correct as isShould be added to balance per bank statementShould be deducted from balance per bank statementShould be deducted from balance per company's records
Error in June 17 deposit	Correct as isShould be added to balance per bank statementShould be added to balance per company's recordsShould be deducted from balance per bank statement

Question Content Area

b. Prepare a new bank reconciliation for Poway Co., using the format shown in the illustrative problem.

Cash balance according to bank statement
Add bank service chargesAdd deposit of June 30, not recorded by bankAdd error in recording June 17 deposit as $1,750 instead of $7,150Add outstanding checks
Deduct service chargesDeduct deposit of June 30, not recorded by bankDeduct note and interest collected by bankDeduct outstanding checks - No. 1067
Deduct service chargesDeduct deposit of June 30, not recorded by bankDeduct note and interest collected by bankDeduct outstanding checks - No. 1106
Deduct service chargesDeduct deposit of June 30, not recorded by bankDeduct note and interest collected by bankDeduct outstanding checks - No. 1110
Deduct service chargesDeduct deposit of June 30, not recorded by bankDeduct note and interest collected by bankDeduct outstanding checks - No. 1113
Adjusted balance
Cash balance according to company's records
Add bank service chargesAdd deposit of June 30, not recorded by bankAdd note and interest collected by bankAdd outstanding checks
Add bank service chargesAdd deposit of June 30, not recorded by bankAdd error in recording June 17 deposit as $1,750 instead of $7,150Add outstanding checks
Deduct check returned because of insufficient fundsDeduct error in recording June 17 deposit as $1,750 instead of $7,150Deduct note and interest collected by bankDeduct outstanding checks
Deduct service chargesDeduct note and interest collected by bankDeduct error in recording June 17 deposit as $1,750 instead of $7,150Deduct outstanding checks
Adjusted balance