Required information Problem 6-5A (Algo) 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 $1,021 and No. 5893 for $506. 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 19,500 TOTAL CHECKS AND DEBITS 9,782 TOTAL DEPOSITS AND CREDITS 11,725 CURRENT BALANCE 21,443 CHECKS AND DEBITS Date No. Amount 09/03 5888 1,021 09/04 5902 781 09/07 5901 1,817 09/17 673 NSF 09/20 5905 909 09/22 5903 430 09/22 5904 2,052 09/28 5907 221 09/29 5909 1,878 DEPOSITS AND CREDITS Date Amount 09/05 1,176 09/12 2,287 09/21 4,336 09/25 2,385 09/30 21 IN 09/30 1,520 CM From Chavez Company's Accounting Records Cash Receipts Deposited Cash Date Debit Sept. 5 1,176 12 2,287 21 4,336 25 2,385 1,688 11,872 Cash Payments Cash Check No. Credit 5901 1,817 5902 781 5903 430 5904 2,012 5905 909 5906 964 5907 221 5908 384 5909 1,878 9,396 PR Debit Credit Cash Date Explanation Aug. 31 Balance Sept. 30 Total receipts 30 Total payments Acct. No. 101 Balance 17,973 29,845 20,449 R12 D23 11,872 9,396 Additional Information (a) Check No. 5904 is correctly drawn for $2,052 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 $2,012. (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 $1,520 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 21,443 Book balance Add: Bank statement balance $ $ 20,499 Add: 0 0 21,443 20,499 Deduct: Deduct: 0 0 Adjusted bank balance $ 21,443 Adjusted book balance $ 20,499