Question

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Problem 6-5A 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 $1,070 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
19,000	9,883	11,713	20,830

CHECKS AND DEBITS					DEPOSITS AND CREDITS
Date	No.	Amount			Date	Amount
09/03	5888	1,070			09/05	1,177
09/04	5902	763			09/12	2,264
09/07	5901	1,829			09/21	4,298
09/17		635	NSF		09/25	2,301
09/20	5905	989			09/30	13	IN
09/22	5903	386			09/30	1,660	CM
09/22	5904	2,115
09/28	5907	214
09/29	5909	1,882

From Chavez Company’s Accounting Records

Cash Receipts Deposited
Date		Cash Debit
Sept.	5		1,177
	12		2,264
	21		4,298
	25		2,301
	30		1,698
			11,738

Cash Payments
Check No.		Cash Credit
5901			1,829
5902			763
5903			386
5904			2,073
5905			989
5906			967
5907			214
5908			443
5909			1,882
			9,546

Cash			Acct. No. 101
Date	Explanation	PR	Debit	Credit	Balance
Aug. 31	Balance				17,421
Sept. 30	Total receipts	R12	11,738		29,159
30	Total payments	D23		9,546	19,613

Additional Information

1. (a) Check No. 5904 is correctly drawn for $2,115 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 $2,073.
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 $1,660 note for Chavez Company by the bank. The collection is not yet recorded.

Problem 6-5A 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.)

Answer 1

				Bank Reconcilation
	Bank Statement Balance				20,830.00	Book Balance				19,613
	AddP					Add:
	Deposit of Sept 30			1,698.00		Interest Earned			13
						Proceed from Note			1660
					1,698.00					1673
					22,528.00					21,286.00
	Deduct:					Deduct:
	Check No 5893			509		NSF Check			635
	Check No 5906			967.00		Error (Check 5904)			42
	Check No 5908			443						677
					1,919.00
	Adjusted Bank Balance				20,609.00	Adjusted Book balance				20,609.00
		Adjusting entries
	Date	Accounting titles & explanations				debit	Credit
2)	2)	Cash				13
		interest earned					13
3)	3)	Cash				1,660
		collection expense				15
		Note receivable					1,665
		(please put the collection expense as given in ur question
		in addittional information .i have taken random figure as it has been cut off)
5)	5)	Accounts receivable -S.Nilson				635
		Cash					635
6)	6)	Computer Equipment				42
		cash					42
		1)	no entry required for deposit
		4)	no entry required for checks oustanding