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 $1,022 and No. 5893 for $488. 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 19,000 TOTAL CHECKS AND DEBITS 9,799 TOTAL DEPOSITS AND CREDITS 11,860 CURRENT BALANCE 21,061 CHECKS AND DEBITS Date No. Amount 09/03 5888 1,022 09/04 5902 718 09/07 5901 1,810 09/17 674 NSF 09/20 5905 974 09/22 5903 392 09/22 5904 2,125 09/28 5907 213 09/29 5909 1,871 DEPOSITS AND CREDITS Date Amount 09/05 1,156 09/12 2,279 09/21 4,426 09/25 2,343 09/30 16 IN 09/30 1,640 CM From Chavez Company's Accounting Records Cash Receipts Deposited Cash Date Debit Sept. 5 1,156 12 2,279 4,426 25 2,343 1,742 11,946 21 30 Cash Payments Cash Check No. Credit 5901 1,810 5902 718 5903 392 5904 2,081 5905 974 5906 1,044 5907 213 5908 379 5909 1,871 9,473 PR Debit Credit Cash Date Explanation Aug. 31 Balance Sept. 30 Total receipts 30 Total payments Acct. No. 101 Balance 17,490 29,436 19,963 R12 D23 11,946 9,473 Additional Information (a) Check No. 5904 is correctly drawn for $2,125 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 $2,081. (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 $1,640 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. CHAVEZ COMPANY Bank Reconciliation September 30 Book balance Add: Bank statement balance Add: 0 0 0 0 Deduct: Deduct: 0 0 Adjusted bank balance $ 0 Adjusted book balance $ 0 2. Prepare journal entries to adjust the book balance of cash to the reconciled balance. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 4 5 6 > Record the entry related to interest earned, if required. Note: Enter debits before credits. General Journal Debit Credit Date Sept 30 Record entry Clear entry View general journal Problem 6-5A (Algo) Part 2 2. Prepare journal entries to adjust the book balance of cash to the reconciled balance. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the entry related to the note receivable and the collection, if required. Note: Enter debits before credits. Date General Journal Debit Credit Sept 30 Record entry Clear entry View general journal Problem 6-5A (Algo) Part 2 2. Prepare journal entries to adjust the book balance of cash to the reconciled balance. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the entry related to the outstanding checks, if required. Note: Enter debits before credits. General Journal Debit Credit Date Sept 30 Record entry Clear entry View general journal Problem 6-5A (Algo) Part 2 2. Prepare journal entries to adjust the book balance of cash to the reconciled balance. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 4 5 5 6 > Record the entry related to the NSF check, if required. Note: Enter debits before credits. General Journal Debit Credit Date Sept 30 Record entry Clear entry View general journal Problem 6-5A (Algo) Part 2 2. Prepare journal entries to adjust the book balance of cash to the reconciled balance. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet