Question

Required information [The following information applies to the questions displayed below.) Chavez Company most recently reconciled its bank statement and book balances of cash on August 31 and it reported two checks outstanding, No. 5888 for $1,010 and No. 5893 for $510. Check No. 5893 was still outstanding as of September 30. The following information is available for its September 30 reconciliation. From the September 30 Bank Statement PREVIOUS BALANCE 17,000 TOTAL CHECKS AND DEBITS 9,663 TOTAL DEPOSITS AND CREDITS 11,603 CURRENT BALANCE 18,940 CHECKS AND DEBITS Date No. Amount 09/03 5888 1,010 09/04 5902 734 09/07 5901 1,805 09/17 615 NSF 09/20 5905 913 09/22 5903 386 09/22 5994 2,087 09/28 5907 227 09/295909 1,886 DEPOSITS AND CREDITS Date Amount 09/05 1,108 09/12 2,257 09/21 4,345 09/25 2,320 09/30 23 IN 09/30 1,550 CM

Answer 1

Solution 1:

Chavez Company
Bank Reconciliation - September 30
Bank's Cash balance			Company's cash balance
Particulars		Amount	Particulars		Amount
Bank statement balance		$18,940.00	Book balance		$17,731.00
Additions:			Additions:
Deposit of Sept 30	$1,685.00		Proceeds of note	$1,550.00
			Interest earned	$23.00
		$1,685.00			$1,573.00
		$20,625.00			$19,304.00
Deductions:			Deductions:
Check no 5893	$510.00		NSF Cheque	$615.00
Check no 5906	$1,019.00		Error (check 5904)	$41.00
Check no 5908	$448.00
		$1,977.00			$656.00
Up to date cash balance as per bank		$18,648.00	Up to date cash balance as per books		$18,648.00

solution 2:

Journal Entries - Chavez Company
S. No.	Particulars	Debit	Credit
1	No Journal Entry Required
2	Cash A/c Dr	$23.00
	To Interest Revenue		$23.00
	(Being interest credited by bank)
3	Cash A/c Dr	$1,550.00
	To Notes Receivables		$1,550.00
	(Being note collected by bank)
4	No Journal Entry Required
5	Accounts Receivables Dr	$615.00
	To Cash		$615.00
	(Being cheque dishonored by bank)
6	Computer Equipment Dr	$41.00
	To Cash		$41.00
	(Being entry recorded with short amount now corrected)