Chavez Company most recently reconciled its bank statement and book balances of
ID: 2538624 • Letter: C
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 $1,013 and No. 5893 for $483. The following information is available for its September 30, 2017, reconciliation. From the September 30 Bank Statement PREVIOUS BALANCE TOTAL CHECKS AND DEBIT TOTAL DEPOSITS AND CREDIT CURRENT BALANCE 18,58e 9,883 11,698 28, 395 CHECKS AND DEBITS DEPOSITS AND CREDITS No Date 09/83 5888 89/84 5982 89/87 5981 Date 89/85 89/12 89/21 677NSF 9/25 89/38 e9/38 1,155 2,243 4, 323 2,383 1,813 727 1,863 89/28 5985 9/22 5983 9/22 5984 89/28 597 89/29 5989 982 418 2,887 244 1,888 2eIN 1,574CM From Chavez Company's Accounting Records Cash Receipts Deposited Cash Date Debit Sept. 5 12 21 25 30 1,155 2,243 4, 323 2, 383 1,663 11,767 5901 5902 5963 5984 5905 5906 5907 5988 5909 Cash Disbursements Cash Credit 1,863 727 418 2,843 982 1,818 244 355 1,888 9,434 Cash Acct· No. 101 Balance PR Debit Credit Aug. 31 Balance Sept. 3e Total receipts 17,884 28,771 19, 337 11,767 R12 D23 30 Total disbursements 9,434 Addltlonal Informatlon Check No. 5904 is correctly drawn for $2,087 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 $2,043. 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 $1,590 note for Chavez Company by the bank. The bank deducted a $16 collection fee. The collection and fee are not yet recorded.Explanation / Answer
2. Entry for interest earned
30 Sept Bank A/c Dr. 20
To Interest Earned A/c 20
3. Entry for Note collection
30 Sept Bank A/c Dr. 1574
Collection Fee A/c Dr. 16
To Note Receivable A/c 1590
4. No entry is required for outstanding checks
5. Entry for NSF Check
17 Sept S. Nilson A/c Dr. 677
To Bank A/c 677
6. Entry for correction of Check No. 5904
30 Sept Cash A/c Dr. 2043
Computer Equipment A/c Dr. 44
To Bank A/c 2087