PROBLEM 4-3A

STEP 1
Diaz Entertainment
BANK RECONCILIATION
May 31 - 2024
BANK’S CASH BALANCE COMPANY’S CASH BALANCE
Per BANK STATEMENT $6,210 Per GENERAL LEDGER $5,100

DEPOSIT OUTSTANDING $3,180 INTEREST EARNED $30

INTEREST ON NOTE $60
CHECK OUTSTANDING: NOTE COLLECTED $1,100
CHK - #471 ($550)
CHK - #472 -3,600 NONSUFFICIENT CHECK ($400)
SERVICE FEES ($50)
ADJUSTED BANK BALANCE $5,840
ADJUSTED COMPANY BALANCE $5,840

STEP 2

CASH ADJUSTMENTS

31-May-24
DEBIT : CREDIT :
NOTES RECEIVABLE $1,100
INTEREST REVENUE $90

CASH $1,190

31-May-24
 DEBIT : CREDIT :
ACCOUNTS RECEIVABLE $400
SERVICE FEE EXPENSE $50

CASH $450
 PROBLEM 4-5A
STEP 1

2-Oct DEBIT CREDIT

CASH $8,500
SERVICE REVENUE $8,500
5-Oct DEBIT CREDIT
CASH $12,000
COMMON STOCK $12,000
9-Oct DEBIT CREDIT
CASH $9,600
COMMON STOCK $4,800
ACCOUNTS PAYABLE $4,800
12-Oct DEBIT CREDIT
ADVERTISING EXPENSE $1,500
CASH $1,500
19-Oct DEBIT CREDIT
DIVIDENDS $4,000
CASH $4,000
22-Oct DEBIT CREDIT
PREPAID INSURANCE $6,900
CASH $6,900
25-Oct DEBIT CREDIT
CASH $5,600
UNEARNED REVENUE $5,600
30-Oct DEBIT CREDIT
UTILITIES EXPENSE $5,200
UTILITIES PAYABLE $5,200
31-Oct DEBIT CREDIT
SALARIES EXPENSE $7,300
 CASH $7,300

STEP 2

All Transactions Involve Cash except

on the date of October 30th

30-Oct DEBIT CREDIT

UTILITIES EXPENSE $5,200
UTILITIES PAYABLE $5,200

Here Cash was received for the

expense of utilities

STEP 3
BALBOA’S GYM
CASH T-ACCOUNT
PERIOD ENDED OCT. 31
DATE : ACCOUNT : DEBIT: DATE : ACCOUNT : CREDIT:
1-Oct BEGINNING BAL. $16,600 9-Oct EQUIPMENT $4,800
2-Oct SERVICE REVENUE $8,500 12-Oct ADVERTISING EXP. $1,500
5-Oct COMMON STOCK $12,000 19-Oct DIVIDENDS $4,400
25-Oct UNEARNED REVENUE $5,600 22-Oct PREPAID INSURANCE $5,600
31-Oct SALARIES EXPENSE $12,000
TOTAL : $42,700 TOTAL : $24,900

31-Oct BEGINNING BALANCE $17,800

STEP 4

BALBOA’S GYM
Statement of Cash Flow
 PERIOD ENDED OCT. 31

CASH FLOW FROM OPERATING ACTIVITIES

ADVERTAISING PAID ($1500)
INSURANCE PAID ($6900)
EMPLOYEE SALARIES ($7300)
NET CASH FLOW FROM OP. ACTIVITIES ($15,700)
CASH FLOW FROM INVESTING ACTIVITIES
MEMBERSHIP FEES RECEIVED FOR OCT. $8,500
EQUIPMENT PURCHASE ($4,800)
MEMBERSHIP FEES RECEIVED FOR OCT. $5,600
NET CASH FLOW FROM INVE. ACTIVITIES $9,300
CASH FLOW FROM FINANCING ACTIVITIES
COMMON STOCK ISSUED $12,000
DIVIDENDS PAID ($4,400)
NET CASH FLOW FROM INVE. ACTIVITIES $7,600

NET DECREASE IN CASH ($1,200)

CASH AT THE BEG. OF PERIOD $16,600
CASH AT THE END OF PERIOD $17,800

STEP 5

CHANGE IN CASH BALANCE = BEGINNING BALANCE - ENDING BALANCE

BEGINNING BALANCE $16,600 2
ENDING BALANCE $17,800

CHANGE IN CASH BALANCE $17,800 - $16,600

CHANGE IN CASH BALANCE $1,200

This is equal to the Net Increase in the Cash Flow Statement