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 $1,097 and No. 5893 for $486. 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
20,000	9,850	11,841	21,991

CHECKS AND DEBITS					DEPOSITS AND CREDITS
Date	No.	Amount			Date	Amount
09/03	5888	1,097			09/05	1,127
09/04	5902	743			09/12	2,257
09/07	5901	1,856			09/21	4,472
09/17		659	NSF		09/25	2,340
09/20	5905	960			09/30	16	IN
09/22	5903	360			09/30	1,629	CM
09/22	5904	2,058
09/28	5907	256
09/29	5909	1,861

From Chavez Company’s Accounting Records

Cash Receipts Deposited
Date		Cash Debit
Sept.	5		1,127
	12		2,257
	21		4,472
	25		2,340
	30		1,653
			11,849

Cash Disbursements
Check No.		Cash Credit
5901			1,856
5902			743
5903			360
5904			2,020
5905			960
5906			1,037
5907			256
5908			403
5909			1,861
			9,496

Cash			Acct. No. 101
Date	Explanation	PR	Debit	Credit	Balance
Aug. 31	Balance				18,417
Sept. 30	Total receipts	R12	11,849		30,266
30	Total disbursements	D23		9,496	20,770

   Additional Information
Check No. 5904 is correctly drawn for $2,058 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 $2,020. 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 $1,650 note for Chavez Company by the bank. The bank deducted a $21 collection fee. The collection and fee are not yet recorded.

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

Answer 1

CHAVEZ COMPANY
Bank Reconciliation
September 30, 2017
Bank statement balance		$21,991	Book balance		$20,770
Add:			Add:
Deposit of Sept. 30	$1,653		Interest earned	$16
			Proceeds of note less $21 fee	$1,629
		1653			1645
		23644			22415
Deduct:			Deduct:
Check No. 5893	486		NSF check	659
Check No. 5906	1037		Error (check 5904)	38
Check No. 5908	403
		1926			697
Adjusted bank balance		21718	Adjusted book balance		21718