Aztec Interiors deposits all cash receipts each Wednesday and Friday in a night depository, after banking hours. The data required to reconcile the bank statement as of May 31 have been taken from various documents and records and are reproduced as follows. The sources of the data are printed in capital letters. All checks were written for payments on account. CASH ACCOUNT: Balance as of May 1 $9,578.00 CASH RECEIPTS FOR MONTH OF May $5,948.81 DUPLICATE DEPOSIT TICKETS: Date and amount of each deposit in May: Date Amount Date Amount Date Amount May 2 $569.50 May 12 $580.70 May 23 $ 331.45 5 701.80 16 600.10 26 601.50 9 819.24 19 701.26 31 1,043.26 CHECKS WRITTEN: Number and amount of each check issued in May: Check No. Amount Check No. Amount Check No. Amount 614 $243.50 621 $309.50 628 $ 837.70 615 350.10 622 Void 629 329.90 616 279.90 623 Void 630 882.80 617 395.50 624 707.01 631 1,081.56 618 435.40 625 158.63 632 62.40 619 320.10 626 550.03 633 310.08 620 328.87 627 318.73 634 503.30 Total amount of checks issued in May $8,405.01 BANK RECONCILIATION FOR PRECEDING MONTH (DATED APRIL 30): Cash balance according to bank statement $ 9,422.80 Add deposit of April 30, not recorded by bank 780.80 $10,203.60 Deduct outstanding checks: No. 580 $310.10 No. 602 85.50 No. 612 92.50 No. 613 137.50 625.60 Adjusted balance $ 9,578.00 Cash balance according to company?s records $ 9,605.70 Deduct service charges 27.70 Adjusted balance $ 9,578.00 Instructions 1. Prepare a bank reconciliation as of May 31. If errors in recording deposits or checks are discovered, assume that the errors were made by the company. Assume that all deposits are from cash sales except for the note receivable of $4,000 and interest of $160 collected on May 14. All checks are written to satisfy accounts payable. 2. Illustrate the effects on the accounts and financial statements of the bank reconciliation. 3. What is the amount of Cash that should appear on the balance sheet as of May 31? 4. Assume that a canceled check for $180 has been incorrectly recorded by the bank as $1,800. Briefly explain how the error would be included in a bank reconciliation and how it should be corrected.

Problem 5-4 Name: Section: Kim McAfee Acct300 Score: 80% Key Code: 2 Instructions Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds are protected and cannot be edited. A red asterisk (*) will appear in the column to the right of an incorrect answer. 1. AZTEC INTERIORS Bank Reconciliation May 31, 2012 Cash balance according to bank statement Add: Deposit of May 31, not recorded by bank $10,956.74 1,043.26 $12,000.00 Deduct outstanding checks: No. 613 No. 632 $137.50 62.40 No. 634 Adjusted balance 503.30 Cash balance according to company's records* Add: $7,121.80 Proceeds of note collected by bank, including interest Company error in recording deposit as 331.45 instead of 731.45 Company error in charging check as $328.87 instead of $238.87 $4,160.00 400.00 90.00 Deduct: Check returned because of insufficient funds Bank service charges Adjusted balance $450.00 25.00 * Cash balance, May 1 4,650.00 $11,771.80 475.00 11,296.80 $9,578.00 Plus cash deposited in May Less checks written in May Balance per company's records, May 31 5,948.81 (8,405.01) $7,121.80 2. Balance Sheet Effects of note collection and correcting company error Statement of Cash Flows O 4,650.00 Effects of NSF check and bank service charge F 3. The amount of cash as it should appear on the balance sheet 4. 703.20 $11,296.80 (475) Assets = Notes/Accts. Cash + Receivable = 4,650.00 (4,000.00) (475) (475) Liabilities Accounts Payable + + Stockholders' Equity Retained Earnings Income Statement Sales Int. revenue Misc. exp