The cash data of Navajo Products for September 20X5 follow:

On September 30, 20X5, Navajo received this bank statement:
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Explanation: BC-bank collection, EFT-electronic funds transfer, NSF-nonsufficient funds check, 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 NSF check was received from a customer.
c. The correct amount of check number 1419, a payment on account, is $4,216. (The Navajo accountant mistakenly recorded the check for $4,126.)
Required
1. Prepare the bank reconciliation of Navajo Products at September 30, 20X5.
2. Describe how a bank account and the bank reconciliation help managers control a firm's

Transcribed Image Text:

Date Jml. Ref. Debit Credit Balance Item Sept. 1 Balance CR 10 CP 16 9,106 3 16,184 4,831 11,353 Cash Receipts (CR) Cash Payments (CP) Date Cash Debit Check No. Cash Credit Sept. 1 $2,716 $ 1,465 $9,106 $11,353 Bank Statement for September 20X5 $7,078 Beginning balance. Deposits and other additions: Sept. 625 EFT 2,716 10. 544 18. 25 896 367 890 Checks and other deductions: Sept. 8..$ 441 NSF . 1,465 450 340 EFT 775 19. 25 SC (8,812) $ 7,359 Ending balace.