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 $1,028 and No. 5893 for $494. 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	TOTAL CHECKS AND DEBITS	TOTAL DEPOSITS AND CREDITS	CURRENT BALANCE
16,800	9,617	11,270	18,453

CHECKS AND DEBITS						DEPOSITS AND CREDITS
Date	No.	Amount				Date	Amount
09/03	5888		1,028			09/05		1,103
09/04	5902		719			09/12		2,226
09/07	5901		1,824			09/21		4,093
09/17			600	NSF		09/25		2,351
09/20	5905		937			09/30		12	IN
09/22	5903		399			09/30		1,485	CM
09/22	5904		2,090
09/28	5907		213
09/29	5909		1,807

From Chavez Company’s Accounting Records

Cash Receipts Deposited
Date		Cash Debit
Sept.	5		1,103
	12		2,226
	21		4,093
	25		2,351
	30		1,682
			11,455

Cash Payments
Check No.		Cash Credit
5901			1,824
5902			719
5903			399
5904			2,060
5905			937
5906			982
5907			213
5908			388
5909			1,807
			9,329

Cash			Acct. No. 101
Date	Explanation	PR	Debit			Credit			Balance
Aug. 31	Balance									15,278
Sept. 30	Total receipts	R12		11,455						26,733
30	Total payments	D23					9,329			17,404

Additional Information

1. (a) Check No. 5904 is correctly drawn for $2,090 to pay for computer equipment; however, the recordkeeper misread the amount and entered it in the accounting records with a debit to Computer Equipment and a credit to Cash of $2,060.
2. (b) The NSF check shown in the statement was originally received from a customer, S. Nilson, in payment of her account. Its return has not yet been recorded by the company.
3. (c) The credit memorandum (CM) is from the collection of a $1,485 note for Chavez Company by the bank. The collection is not yet recorded.

Required:

1. Prepare the September 30 bank reconciliation for this company.

1. Prepare the Septembe reconciliation for this company. CHAVEZ COMPANY Bank Reconciliation September 30 Bank statement balance Book balance Add: Add: 0 0 0 0 Deduct: Deduct: 0 0 Adjusted bank balance $ 0 Adjusted book balance $ 0

Answer 1

А E F 1 2 B C D Chavez Company Bank Reconciliation Sep-30 $ 18,453 Book balance Add: $ 1,682 $ 1,682 Collection of note $ 20,135 Interest earned 3 4 Bank statement balance 5 Add: 6 Deposits in transit 7 $ 17,404 $ 1,485 $ 12 $ 1,497 $ 18,901 8 9 Deduct: 10 Outstanding Checks 11 No: 5893 12 No: 5906 13 No: 5908 14 Adjusted bank balance $ 494 $ 982 $ 388 Deduct: NSF Check $ 600 Error in recording ($2,090 - $2,060) $ 30$ 630 1864 $ 18,271 Adjusted book balance $ 18,271

A B с D E F 1 Chavez Company Bank Reconciliation 2 18453 17404 3 11202 4 Bank statement balance 5 Add: 6 Deposits in transit 7 Book balance Add: Collection of note Interest earned 1485 1682 =+B6 =+C4+C6 12 =+E6+E7 =+F4+F7 8 494 9 Deduct: 10 Outstanding Checks 11 No: 5893 12 No: 5906 13 No: 5908 14 Adjusted bank balance 982 Deduct: NSF Check 600 Error in recording ($2,090 - $2,060) =2090-2060 =+E11+E12 =+B11+B12+B13 =+C7-C13 Adjusted book balance =+F8-F12 388