Problem - Brighton Early's Worm Farm received a bank statement for the month ending June 30, 2015, which showed an ending balance of $9,660. The company's Cash account in the general ledger showed a balance of $8,011 as of June 30, 2015.
Other information that may be relevant in preparing a bank reconciliation as of June 30, 2015, is as follows:
- Checks which were written in June 2015 but still had not been presented to the bank for payment at June 30, 2015, amounted to $1,225. There were no other checks from prior months which had not been presented to the bank for payment.
- A check written by Brighton Early's Worm Farm and correctly paid by the bank for $1,470 was incorrectly recorded in the cash payments journal as $1,381. The check was a payment on an account to a vendor.
- Brighton Early's Worm Farm recorded cash receipts of $1,246 on June 30, 2015, but this amount does not yet appear on the bank statement.
- The bank included a credit to the company's bank account for $3,152, which represents a collection of a customer's note receivable by the bank on behalf of Brighton Early's Worm Farm. The principal amount of the note was $3,000, while the remainder was interest.
- The bank charged the company's bank account $25 for service charges for the month of June.
- The bank returned an NSF check from a customer of Brighton Early's Worm Farm for $635. The check had been received from a customer for its payment of its outstanding account.
- The bank cleared a check for $733 against Brighton Early's Worm Farm's bank account that actually should have been cleared against another bank customer's account (i.e., it was not a check written by Brighton Early's Worm Farm.)