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 \(1,028.05 and No. 5893 for \)494.25. The following information is available for its September 30, 2017, reconciliation.

From the September 30 Bank Statement 16,800.45 9,620.05 11,272.85 18,453.25 PREVIOUS BALANCE TOTAL CHECKS AND DEBITS TOTAL DEPOSITS AND CREDITS CURRENT BALANCE Date 09/03 09/04 09/07 09/20 09/17 09/22 09/22 09/28 09/29 CHECKS AND DEBITS DEPOSITS AND CREDITS 5888 1,028.05 09/05 1,103.75 No. Amount Date Amount 5902 719.90 09/12 2,226.90 5901 1,824.25 09/21 4,093.00 5905 937.00 09/30 12.50 IN 09/25 2,351.70 5903 399.10 09/30 1,485.00 CM 5904 5907 5909 2,090.00 213.85 1,807.65

From Chavez Company’s Accounting Records Cash Acct. No. 101 Date Explanation PR Debit Credit Balance Aug. 31 Balance 15,278.15 Sep. 30 Total receipts R12 11,458.10 26,736.25 30 Total disbursements D23 9,332.05 17,404.20 Cash Receipts Deposited Cash Date Debit Sep. 5 1,103.75 12 2,226.90 21 4,093.00 25 2,351.70 30 1,682.75 11,458.10 Cash Disbursements Check Cash No. Credit 5901 1,824.25 5902 719.90 5903 399.10 5904 2,060.00 5905 937.00 5906 982.30 5907 213.85 5908 388.00 5909 1,807.65 9,332.05

Additional Information

Check No. 5904 is correctly drawn for \(2,090 to pay for computer equipment; however, the recordkeeper misread the amount and entered it in the accounting records with a debit to Computer Equipment and a credit to Cash of \)2,060. 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 (CM) is from the collection of a \(1,500 note for Chavez Company by the bank. The bank deducted a \)15 collection expense. The collection and fee are not yet recorded.

Required

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

Short answer

Answer

The Adjusted Bank statement balance and Adjusted Book balance are $18,271.45.

Step-by-step solution

Step-by-Step SolutionStep 1: Introduction to topic

Adjusted Bank statement Balance- The bank statement's ending balance gets adjusted to show outstanding checks or withdrawals. These are the transactions in which payment is in transit, yet the recipient has not yet acknowledged the cash.

Bank Reconciliation Statement-

CHAVEZ COMPANY
Bank Reconciliation
September 30, 2015
Bank statement balance		$18,453.2	Book balance		$17,404.20
Add:			Add:
Deposit of Sept. 30	$1,682.75		Interest earned	$12.50
			Proceeds of note less $15 fee	1,485.0
		1,682.75			1,497.5
		20,136.00			18,901.70
Deduct:			Deduct:
Check No. 5893	494.25		NSF check	600.25
Check No. 5906	982.30		Error (check 5904)	30.00
Check No. 5908	388.0
		1,864.5			630.25
Adjusted bank balance		$18,271.45	Adjusted book balance		$18,271.45