Question

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 $1,018 and No. 5893 for $512. 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
17,500	9,991	11,499	19,008

CHECKS AND DEBITS					DEPOSITS AND CREDITS
Date	No.	Amount			Date	Amount
09/03	5888	1,018			09/05	1,135
09/04	5902	782			09/12	2,269
09/07	5901	1,889			09/21	4,181
09/17		697	NSF		09/25	2,373
09/20	5905	982			09/30	21	IN
09/22	5903	402			09/30	1,520	CM
09/22	5904	2,098
09/28	5907	253
09/29	5909	1,870

From Chavez Company’s Accounting Records

Cash Receipts Deposited
Date		Cash Debit
Sept.	5		1,135
	12		2,269
	21		4,181
	25		2,373
	30		1,757
			11,715

Cash Payments
Check No.		Cash Credit
5901			1,889
5902			782
5903			402
5904			2,059
5905			982
5906			1,005
5907			253
5908			440
5909			1,870
			9,682

Cash			Acct. No. 101
Date	Explanation	PR	Debit	Credit	Balance
Aug. 31	Balance				15,970
Sept. 30	Total receipts	R12	11,715		27,685
30	Total payments	D23		9,682	18,003

Additional Information

1. (a) Check No. 5904 is correctly drawn for $2,098 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 $2,059.
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 $1,520 note for Chavez Company by the bank. The collection is not yet recorded.

Required:

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

Answer 1

CHAVEZ COMPANY
Bank Reconciliation
September 30, 2017
Bank statement balance		19008	Book balance		18003
Add:			Add:
Deposit of Sept. 30	1757		Interest earned	21
			Proceeds of note	1520
		1757			1541
		20765			19544
Deduct:			Deduct:
Check No. 5893	512		NSF check	697
Check No. 5906	1005		Error (check 5904)	39
Check No. 5908	440
		1957			736
Adjusted bank balance		18808	Adjusted book balance		18808