BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

Solutions

Chapter
Section
BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
3 views

Case 4-70 CONTINUING PROBLEM: FRONT ROW ENTERTAINMENT

Over the next 2 months, Front Row Entertainment continued to enjoy success in signing artists and promoting their events. However, the increased business has put considerable stress on keeping timely and up-to-date financial records. In particular, both Cam and Anna are concerned with the accounting and management of the company’s cash.

The tour promotion industry is a cash-intensive industry, normally requiring large prepayments to secure venues and arrange advertising. When the number of artists under contract were small, Cam and Anna developed a simple system to manage the company’s cash. Normally, any cash received was put in a file cabinet in the company’s office. If the amount appeared to be getting large, a deposit was made. Similarly, if a large check needed to be written, either Cam or Anna would check the balance in the checkbook. If cash was not sufficient to cover the check, they'd get cash from the file cabinet and deposit the amount necessary to cover the check.

However, with the increasing business, they would often forget to make deposits, causing several checks to be returned for non-sufficient funds. In addition, they were in the process of hiring additional office staff who would start work on May l. They knew that leaving cash in a file cabinet would not be a good idea.

In order to obtain a better understanding of their cash position, Anna decides to perform a bank reconciliation-something she had failed to do since the company was started. According to the accounting records, the cash balance at April 30 was $7,495. Anna obtained the following information from Front Row’s April bank statement and an analysis of canceled checks and deposits:

Balance per bank at April 30 $3,250

Deposits in transit at April 30 4,370

Outstanding checks as of April 30 1,160

Debit memo for April utilities 845

Bank service charge for April 50

Interest earned during April 450

NSF check from customer 590

Required:

3. Prepare any adjusting entries necessary because of the bank reconciliation.

To determine

Concept Introduction:

Bank Reconciliation:

Bank reconciliation is the process in which the entity reconciles its cash entries in accounts with the entries in bank statement issued by the bank. The entity prepares bank reconciliation statement and it has two sides; Bank Side and Cash side.

To Prepare:

The necessary adjusting entries for bank reconciliation.

Explanation

The necessary adjusting entries are explained as follows:

    Front Row Entertainment
    Bank Reconciliation
    Journal Entries
    Date Accounts titles and Explanation Debit Credit
    Apr. 30Cash $ 450
    Interest earned $450
    (Being adjustment made for interest earned)
    Apr...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What are the major elements of Taylors scientific management?

Foundations of Business (MindTap Course List)

Explain what the value of momentum represents.

Engineering Fundamentals: An Introduction to Engineering (MindTap Course List)

Provide a brief rationale for your recommended course of action.

Principles of Information Systems (MindTap Course List)

What determines the ampacity of a wire?

EBK ELECTRICAL WIRING RESIDENTIAL

The force system shown can be replaced with a single, equivalent couple CR. Determine CR.

International Edition---engineering Mechanics: Statics, 4th Edition

List symptoms of technology addiction. Define the term, technology overload.

Enhanced Discovering Computers 2017 (Shelly Cashman Series) (MindTap Course List)