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Problem 6-5A (Algo) Preparing a bank reconciliation and recording adjustments LO P3

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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 $1,068 and No. 5893 for $509. 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	TOTAL CHECKS AND DEBITS	TOTAL DEPOSITS AND CREDITS	CURRENT BALANCE
20,000	9,902	11,463	21,561

CHECKS AND DEBITS					DEPOSITS AND CREDITS
Date	No.	Amount			Date	Amount
09/03	5888	1,068			09/05	1,152
09/04	5902	707			09/12	2,293
09/07	5901	1,896			09/21	4,078
09/17		663	NSF		09/25	2,309
09/20	5905	909			09/30	21	IN
09/22	5903	420			09/30	1,610	CM
09/22	5904	2,126
09/28	5907	229
09/29	5909	1,884

From Chavez Companys Accounting Records

Cash Receipts Deposited
Date		Cash Debit
Sept.	5		1,152
	12		2,293
	21		4,078
	25		2,309
	30		1,722
			11,554

Cash Payments
Check No.		Cash Credit
5901			1,896
5902			707
5903			420
5904			2,088
5905			909
5906			1,024
5907			229
5908			385
5909			1,884
			9,542

Cash			Acct. No. 101
Date	Explanation	PR	Debit	Credit	Balance
Aug. 31	Balance				18,423
Sept. 30	Total receipts	R12	11,554		29,977
30	Total payments	D23		9,542	20,435

Additional Information

1. (a) Check No. 5904 is correctly drawn for $2,126 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 $2,088.
2. (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.
3. (c) The credit memorandum (CM) is from the collection of a $1,610 note for Chavez Company by the bank. The collection is not yet recorded.

Problem 6-5A (Algo) Part 1

Required: 1. Prepare the September 30 bank reconciliation for this company.