Question

Required information: [The following information applies to the questions displayed below.]

The cash records and bank statement for the month of May for Diaz Entertainment are shown below.

DIAZ ENTERTAINMENT

Cash Account Records

May 1, 2021, to May 31, 2021

Cash Balance

Cash Balance

May 1, 2021

+

Cash Receipts

−

Cash Disbursements

=

May 31, 2021

$5,410

$11,390

$11,440

$5,360

Cash Receipts

Cash Disbursements

Date

Desc.

Amount

Date

Check#

Desc.

Amount

5/3

Sales

$

1,330

5/7

471

Legal fees

$

1,170

5/10

Sales

1,760

5/12

472

Property tax

1,540

5/17

Sales

2,390

5/15

473

Salaries

3,470

5/24

Sales

2,860

5/22

474

Advertising

1,370

5/31

Sales

3,050

5/30

475

Supplies

420

5/31

476

Salaries

3,470

$

11,390

$

11,440

P.O. Box 162647

Midwest Bank

Member FDIC

Bowlegs, OK 74830

Looking Out For You

(405) 369-CASH

Account Holder:

Diaz Entertainment

Account Number:

7772854360

124 Saddle Blvd,

Bowlegs, OK 74830

Statement Date:

May 31, 2021

Account Summary

Beginning Balance

Deposits and Credits

Withdrawals and Debits

Ending Balance

May 1, 2021

NO.

Total

NO.

Total

May 31, 2021

$6,130

7

$9,504

9

$9,047

$6,587

Account Details

Deposits and Credits

Withdrawals and Debits

Daily Balance

Date

Amount

Desc.

Date

No.

Amount

Desc.

Date

Amount

5/4

$

1,330

DEP

5/1

469

$

420

CHK

5/1

$

5,710

5/11

1,760

DEP

5/2

470

300

CHK

5/2

5,410

5/18

2,390

DEP

5/9

471

1,170

CHK

5/4

6,740

5/20

1,100

NOTE

5/11

270

NSF

5/9

5,570

5/20

47

INT

5/12

472

1,540

CHK

5/11

7,060

5/25

2,860

DEP

5/18

473

3,470

CHK

5/12

5,520

5/31

17

INT

5/20

470

EFT

5/18

4,440

5/25

474

1,370

CHK

5/20

5,117

5/31

37

SF

5/25

6,607

$

9,504

$

9,047

5/31

$

6,587

Desc.		DEP Customer deposit		INT Interest earned		SF Service fees
		NOTE Note collected		CHK Customer check		NSF Nonsufficient funds
		EFT Electronic funds transfer

Additional information:

1. The difference in the beginning balances in the company’s records and the bank statement relates to checks #469 and #470, which are outstanding as of April 30, 2021 (prior month).
2. The bank made the EFT on May 20 in error. The bank accidentally charged Diaz for payment that should have been made on another account

Part a: Prepare a bank reconciliation for Diaz's checking account on May 31, 2021. (Amounts to be deducted should be indicated with a minus sign. Total entries to the same account together when entering in the bank reconciliation.)

	DIAZ ENTERTAINMENT Bank Reconciliation May 31, 2021 Bank's Cash Balance Company's Cash Balance Per bank statement Per general ledger Bank balance per reconciliation      Company balance per reconciliation.

Part B: Record the necessary cash adjustments. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Total entries to the same account together when entering in the journal entry carousel.)

1. Record the amounts that increase cash.

2. Record the amounts that decrease cash.

Answer 1

Bank's cash balance		Company's cash balance
Per Bank statement	6587	Per general ledger	5360
Deposits outstanding	3050	Interest earned	64
Checks outstanding	-3890	Note collected	1100
Bank error	470	NSF check	-270
		Service fees	-37
Bank balance per reconciliation	6217	Company balance per reconciliation	6217

1
	Debit	Credit
Cash	1164
Notes Receivable		1100
Interest revenue		64	=47+17
2
	Debit	Credit
Accounts Receivable	270
Service fee expense	37
Cash		307