Problem 8-5A Preparing a bank reconciliation and recording adjustments LO P3 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 $1,026 and No. 5893 for $518. 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 16,589 TOTAL CHECKS AND DEBITS 9,837 TOTAL DEPOSITS AND CREDITS 11.454 CURRENT BALANCE 18, 117 CHECKS AND DEBITS Date No. Amount 09/03 5888 1,026 09/04 5902 762 29/07 59e1 1,844 09/17 616 NSF 09/20 5905 991 89/22 5983 359 89/22 5984 2,892 09/28 5987 277 09/29 5989 DEPOSITS AND CREDITS Date Amount 09/05 1,187 09/12 2,233 09/21 4,066 09/25 2,390 09/30 18 IN e9/30 1,560 CM Debit Credit Cash Date Explanation Aug. 31 Balance Sept. 30 Total receipts 30 Total payments Acct. No. 101 Balance 14,956 26,529 16,931 11,573 R12 023 9,598 Additional Information (a) Check No. 5904 is correctly drawn for $2,092 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 $2,054. (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 (c) The credit memorandum (CM) is from the collection of a $1,560 note for Chavez Company by the bank. The collection is not yet recorded. Required: 1. Prepare the September 30 bank reconciliation for this company. CHAVEZ COMPANY Bank Reconciliation September 30 Book balance Add: Bank statement balance Add: Deduct Deduct: Adjusted bank balance Adjusted book balance