The cash records and bank statement for the month of May for Diaz Entertainment

Question

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

  

   

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

  
Additional information:

a. 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, 2018 (prior month).
b. 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.

1. Prepare a bank reconciliation for Diaz's checking account on May 31, 2018. (Amounts to be deducted should be indicated with a minus sign. Total entries to the same account together when entering in the bank reconciliation.)

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.)
  

DIAZ ENTERTAINMENT
Cash Account Records
May 1, 2018, to May 31, 2018 Cash Balance
May 1, 2018 + Deposits – Checks = Cash Balance
May 31, 2018 $5,330         $11,790      $11,920         $5,200        

Explanation / Answer

Solution 1:

Solution 2:

Diaz Entertainment Bank Reconciliation - May 31 Bank's Cash balance Company's cash balance Particulars Amount Particulars Amount Ending balance as per Bank Statements $6,455.00 Ending Balance as per cash books $5,200.00 Additions: Additions: Outstanding deposit $3,130.00 Note Collection $1,200.00 Incorrect EFT debited by bank $550.00 Interest revenue $80.00 Deductions: Deductions: Outstanding Checks (Check 475 and check 476) $4,050.00 NSF Check $350.00 Service Charge $45.00 Up to date cash balance as per bank $6,085.00 Up to date cash balance as per books $6,085.00

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