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 $1,015 and No. 5893 for $498. The following information is available for its September 30, 2017, reconciliation. From the September 30 Bank Statement PREVIOUS BALANCE TOTAL CHECKS AND DEBITS TOTAL DEPOSITS AND CREDITS CURRENT BALANCE 19,500 9,778 11,638 21,360 CHECKS AND DEBITS DEPOSITS AND CREDITS Date No. Amount Date Amount 09/03 5888 1,015 09/05 1,174 09/04 5902 776 09/12 2,229 09/07 5901 1,802 09/21 4,233 09/17 659 NSF 09/25 2,391 09/20 5905 956 09/30 18 IN 09/22 5903 356 09/30 1,593 CM 09/22 5904 2,095 09/28 5907 254 09/29 5909 1,865 From Chavez Company’s Accounting Records Cash Receipts Deposited Date Cash Debit Sept. 5 1,174 12 2,229 21 4,233 25 2,391 30 1,732 11,759 Cash Disbursements Check No. Cash Credit 5901 1,802 5902 776 5903 356 5904 2,053 5905 956 5906 1,020 5907 254 5908 361 5909 1,865 9,443 Cash Acct. No. 101 Date Explanation PR Debit Credit Balance Aug. 31 Balance 17,987 Sept. 30 Total receipts R12 11,759 29,746 30 Total disbursements D23 9,443 20,303 Additional Information Check No. 5904 is correctly drawn for $2,095 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 $2,053. 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. The credit memorandum is from the collection of a $1,610 note for Chavez Company by the bank. The bank deducted a $17 collection fee. The collection and fee are not yet recorded.

Required: 1. Prepare the September 30, 2017, bank reconciliation for this company.

Answer 1

CHAVEZ COMPANY
Bank Reconciliation
September 30, 2017
Bank statement balance		21360	Book balance		20303
Add:			Add:
Deposit of Sept. 30	1732		Interest earned	18
			Proceeds of note less $17 fee	1593
		1732			1611
		23092			21914
Deduct:			Deduct:
Check No. 5893	498		NSF check	659
Check No. 5906	1020		Error (check 5904)	42
Check No. 5908	361
		1879			701
Adjusted bank balance		21213	Adjusted book balance		21213