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In: Accounting

[The following information applies to the questions displayed below.] Chavez Company most recently reconciled its bank...

[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 $1,063 and No. 5893 for $485. 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
17,000 10,004 11,803 18,799
CHECKS AND DEBITS DEPOSITS AND CREDITS
Date No. Amount Date Amount
09/03 5888 1,063 09/05 1,177
09/04 5902 757 09/12 2,228
09/07 5901 1,899 09/21 4,463
09/17 653 NSF 09/25 2,381
09/20 5905 987 09/30 13 IN
09/22 5903 423 09/30 1,541 CM
09/22 5904 2,129
09/28 5907 236
09/29 5909 1,857


From Chavez Company’s Accounting Records

Cash Receipts Deposited
Date Cash
Debit
Sept. 5 1,177
12 2,228
21 4,463
25 2,381
30 1,744
11,993
Cash Disbursements
Check No. Cash
Credit
5901 1,899
5902 757
5903 423
5904 2,091
5905 987
5906 1,028
5907 236
5908 381
5909 1,857
9,659
Cash Acct. No. 101
Date Explanation PR Debit Credit Balance
Aug. 31 Balance 15,452
Sept. 30 Total receipts R12 11,993 27,445
30 Total disbursements D23 9,659 17,786


Additional Information
Check No. 5904 is correctly drawn for $2,129 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 $2,091. 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 $1,560 note for Chavez Company by the bank. The bank deducted a $19 collection fee. The collection and fee are not yet recorded.

Problem 6-5A Part 1

Required:

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

CHAVEZ COMPANY
Bank Reconciliation
September 30, 2017
Bank statement balance Book balance
Add: Add:
0 0
0 0
Deduct: Deduct:
0 0
Adjusted bank balance $0 Adjusted book balance $0

1

Record the entry related to the September 30 deposit, if required.

2

Record the entry related to interest earned, if required.

3

Record the entry related to the note receivable and the collection fee, if required.

4

Record the entry related to the outstanding checks, if required.

5

Record the entry related to the NSF check, if required.

6

Record the entry related to the error on check 5904, if required.

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

CHAVEZ COMPANY
Bank Reconciliation
September 30, 2017
Bank statement balance Book balance
Add: Add:
0 0
0 0
Deduct: Deduct:
0 0
Adjusted bank balance $0 Adjusted book balance $0

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