Question

Problem 4-3A Prepare the bank reconciliation and record cash adjustments (LO4-5)

[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

$5,450

$11,190

$11,200

$5,440

Cash Receipts

Cash Disbursements

Date

Desc.

Amount

Date

Check#

Desc.

Amount

5/3

Sales

$

1,290

5/7

471

Legal fees

$

1,130

5/10

Sales

1,720

5/12

472

Property tax

1,500

5/17

Sales

2,350

5/15

473

Salaries

3,430

5/24

Sales

2,820

5/22

474

Advertising

1,330

5/31

Sales

3,010

5/30

475

Supplies

380

5/31

476

Salaries

3,430

$

11,190

$

11,200

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

$6,090

7

$9,436

9

$8,723

$6,803

Account Details

Deposits and Credits

Withdrawals and Debits

Daily Balance

Date

Amount

Desc.

Date

No.

Amount

Desc.

Date

Amount

5/4

$

1,290

DEP

5/1

469

$

380

CHK

5/1

$

5,710

5/11

1,720

DEP

5/2

470

260

CHK

5/2

5,450

5/18

2,350

DEP

5/9

471

1,130

CHK

5/4

6,740

5/20

1,200

NOTE

5/11

230

NSF

5/9

5,610

5/20

43

INT

5/12

472

1,500

CHK

5/11

7,100

5/25

2,820

DEP

5/18

473

3,430

CHK

5/12

5,600

5/31

13

INT

5/20

430

EFT

5/18

4,520

5/25

474

1,330

CHK

5/20

5,333

5/31

33

SF

5/25

6,823

$

9,436

$

8,723

5/31

$

6,803

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.

Problem 4-3A Part 2

2. 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.)

3. 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.)

Answer 1

			DIAZ ENTERTAINMENT
			Bank Reconciliation
			May 31,2021
Bank's Cash Balance				Company's Cash Balance
Per bank statement			6,803	per general ledger			5,440
Deposit in transit			3,010	Note collected			1200
Bank error			430	interest earned			56
checks outstanding			-3810	NSF			-230
				service fees			-33
Bank bal per recociliation			6,433	Company bal per reconciliation			6,433
	Account title & explanation					debit	Credit
	Cash					1,256
	note receivable						1,200
	interest earned						56
	Service fees expense					33
	accounts receivable					230
	cash						263