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 $517. 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
18,500	9,922	11,574	20,152

CHECKS AND DEBITS					DEPOSITS AND CREDITS
Date	No.	Amount			Date	Amount
09/03	5888	1,089			09/05	1,144
09/04	5902	708			09/12	2,222
09/07	5901	1,801			09/21	4,313
09/17		686	NSF		09/25	2,386
09/20	5905	939			09/30	22	IN
09/22	5903	434			09/30	1,487	CM
09/22	5904	2,130
09/28	5907	261
09/29	5909	1,874

From Chavez Company’s Accounting Records

Cash Receipts Deposited
Date		Cash Debit
Sept.	5		1,144
	12		2,222
	21		4,313
	25		2,386
	30		1,656
			11,721

Cash Disbursements
Check No.		Cash Credit
5901			1,801
5902			708
5903			434
5904			2,093
5905			939
5906			961
5907			261
5908			405
5909			1,874
			9,476

Cash			Acct. No. 101
Date	Explanation	PR	Debit	Credit	Balance
Aug. 31	Balance				16,894
Sept. 30	Total receipts	R12	11,721		28,615
30	Total disbursements	D23		9,476	19,139

Additional Information
Check No. 5904 is correctly drawn for $2,130 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 $2,093. 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 $1,510 note for Chavez Company by the bank. The bank deducted a $23 collection fee. The collection and fee are not yet recorded.

Answer 1

	CHAVEZ COMPANY
	Bank Reconciliation
	Sep-30
	Bank Statement Balance		20,152	Book Balance		19,139
	Add:			Add:
	Deposit in Transit of Sep 30	1,656		Note Collected	1,487
				Interest Received	22
	Deduct:			Deduct:
	Outstanding Checks(#5893)	517		Error in recording check #5904	37
	Outstanding Checks(#5908)	405		NSF Check	686
	Outstanding Checks(#5906)	961
	Adjusted Bank Balance		19,925	Adjusted Book Balance		19,925
	Journal Entries
	General Journal	Debit	Credit
1)	No Entry Required
2)	Cash	22
	Interest Revenue		22
	(To record interest revenue)
3)	CASH	1,487
	Note Receivable		1487
	(To record note receivable)
4)	No Entry Required
5)	Accounts Receivable	686
	Cash		686
	(To record NSF Check)
6)	Computer Equipments	37
	Cash		37
	(To record error correction)