The cash data of Navajo Products for September 2014 follow:

On September 30, 2014, Navajo received this bank statement:

Explanation: BC-bank collection, EFT-electronic funds transfer, NSF-nonsufficient funds cheque, SC-service charge
Additional data for the bank reconciliation:
a. The EFT deposit was for monthly rent revenue. The EFT deduction was for monthly insurance expense.
b. The bank collection was of a note receivable.
c. The NSF cheque was received from a customer.
d. The correct amount of cheque number 1419, a payment on account, is $4,216. (The Navajo accountant mistakenly recorded the cheque for $4,126.)
Requirements
1. Prepare the bank reconciliation of Navajo Products at September 30, 2014.
2. Describe how a bank account and the bank reconciliation help managers control a firm's cash.

Transcribed Image Text:

Item Jrnl. Ref. Debit Credit Balance Sept. 1 Balance CR 10 CP 16 9,106 16,184 11,353 Cash Receipts (CR) Cash Payments (CP) Cash Debit Cash Credit $ 1,465 2,716 2 0 4 $ 9,106 $11,353 Bank Statement for September 2014 $7,078 Beginning Deposits and other additions 625 EFT 2,716 Sept. 1 10 12 15 18 25 30 544 1,655 896 367 890 1.400 BC 9,093 Cheques and other deductions $441 NSF Sept. 8 13 14 15 19 1,465 1,004 450 8 340 EFT 775 29 30 30 Ending balance 4,216 25 SC (8,812)