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 $1,089 and No. 5893 for $509. 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
20,000	9,724	11,564	21,840

CHECKS AND DEBITS					DEPOSITS AND CREDITS
Date	No.	Amount			Date	Amount
09/03	5888	1,089			09/05	1,162
09/04	5902	723			09/12	2,265
09/07	5901	1,811			09/21	4,237
09/17		622	NSF		09/25	2,329
09/20	5905	904			09/30	21	IN
09/22	5903	363			09/30	1,550	CM
09/22	5904	2,099
09/28	5907	261
09/29	5909	1,852

From Chavez Company’s Accounting Records

Cash Receipts Deposited
Date		Cash Debit
Sept.	5		1,162
	12		2,265
	21		4,237
	25		2,329
	30		1,679
			11,672

Cash Payments
Check No.		Cash Credit
5901			1,811
5902			723
5903			363
5904			2,056
5905			904
5906			1,017
5907			261
5908			390
5909			1,852
			9,377

Cash			Acct. No. 101
Date	Explanation	PR	Debit	Credit	Balance
Aug. 31	Balance				18,402
Sept. 30	Total receipts	R12	11,672		30,074
30	Total payments	D23		9,377	20,697

Additional Information

1. (a) Check No. 5904 is correctly drawn for $2,099 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 $2,056.
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 $1,550 note for Chavez Company by the bank. The collection is not yet recorded.

Answer 1