Exercise 8-6 Petty cash fund accounting L.O. P2
[The following information applies to the questions displayed below.]
NetPerks Co. establishes a $200 petty cash fund on January 1. On January 8, the fund shows $28 in cash along with receipts for the following expenditures: postage, $64; transportation-in, $19; delivery expenses, $36; and miscellaneous expenses, $53. NetPerks uses the perpetual system in accounting for merchandise inventory.
Exercise 8-6 Part 1
1. Prepare journal entry to establish the fund on January 1. (Omit the “$” sign in your response.)
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Date |
General Journal |
Debit |
Credit |
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Jan. 1 |
2. Prepare journal entry to reimburse it on January 8. (Omit the “$” sign in your response.)
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Date |
General Journal |
Debit |
Credit |
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Jan. 8 |
Prepare journal entries to both reimburse the fund and increase it to $500 on January 8, assuming no entry in part 2. (Omit the “$” sign in your response.)
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Date |
General Journal |
Debit |
Credit |
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Jan. 8 |
Exercise 8-7 Bank reconciliation and adjusting entries L.O. P3
A table for a monthly bank reconciliation dated September 30 is given below. For each item 1 through 12, indicate whether the item should be added to or deducted from the book or bank balance, or whether it should not appear on the reconciliation. (Select the answers in the appropriate cells and Leave no cells blank be certain to select “NA” in fields which are not applicable.)
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Bank Balance |
Book Balance |
Shown/Not Shown |
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Bank service charge for September. |
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Checks written and mailed to payees on October 2. |
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Checks written by another depositor but charged against this company s account. |
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Principal and interest on a note receivable to this company is collected by the bank but not yet recorded by the company. |
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Special bank charge for collection of note in part 4 on this company”s behalf. |
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Check written against the company”s account and cleared by the bank; erroneously not recorded by the company”s recordkeeper. |
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Interest earned on the September cash balance in the bank. |
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Night deposit made on September 30 after the bank closed. |
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Checks outstanding on August 31 that cleared the bank in September. |
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NSF check from customer is returned on September 25 but not yet recorded by this company. |
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Checks written by the company and mailed to payees on September 30. |
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Deposit made on September 5 and processed by the bank on September 6. |
Problem 8-2A Establish, reimburse, and adjust petty cash L.O. P2
Shawnee Co. set up a petty cash fund for payments of small amounts. The following transactions involving the petty cash fund occurred in May (the last month of the company”s fiscal year).
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May |
1 |
Prepared a company check for $250 to establish the petty cash fund. |
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15 |
Prepared a company check to replenish the fund for the following expenditures made since May1. |
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16 |
Prepared a company check for $200 to increase the fund to $450. |
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31 |
The petty cashier reports that $293.39 cash remains in the fund. A company check is drawn to replenish the fund for the following expenditures made since May 15. |
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31 |
The company decides that the May 16 increase in the fund was too large. It reduces the fund by $50, leaving a total of $400. |
Required:
Prepare journal entries to establish the fund on May 1, to replenish it on May 15 and on May 31, and to reflect any increase or decrease in the fund balance on May 16 and May 31. (Round your answers to 2 decimal places. Omit the “$” sign in your response.)
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Date |
General Journal |
Debit |
Credit |
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May 1 |
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May 15 |
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May 16 |
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May 31 |
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May 31 |
Problem 8-4A Prepare a bank reconciliation and record adjustments L.O. P3
[The following information applies to the questions displayed below.]
The following information is available to reconcile Clark Company s book balance of cash with its bank statement cash balance as of July 31, 2011.
On July 31, the company s Cash account has a $26,193 debit balance, but its July bank statement shows a $28,020 cash balance.
Check No. 3031 for $1,380 and Check No. 3040 for $552 were outstanding on the June 30 bank reconciliation. Check No. 3040 is listed with the July canceled checks, but Check No. 3031 is not. Also, Check No. 3065 for $336 and Check No. 3069 for $2,148, both written in July, are not among the canceled checks on the July 31 statement.
In comparing the canceled checks on the bank statement with the entries in the accounting records, it is found that Check No. 3056 for July rent was correctly written and drawn for $1,250 but was erroneously entered in the accounting records as $1,230.
A credit memorandum enclosed with the July bank statement indicates the bank collected $9,000 cash on a non-interest-bearing note for Clark, deducted a $45 collection fee, and credited the remainder to its account. Clark had not recorded this event before receiving the statement.
A debit memorandum for $805 lists a $795 NSF check plus a $10 NSF charge. The check had been received from a customer, Jim Shaw. Clark has not yet recorded this check as NSF.
Enclosed with the July statement is a $15 debit memorandum for bank services. It has not yet been recorded because no previous notification had been received.
Clark s July 31 daily cash receipts of $10,152 were placed in the bank s night depository on that date, but do not appear on the July 31 bank statement.
Problem 8-4A Part 1
Required:
Prepare the bank reconciliation for this company as of July 31, 2011. (Input all amounts as positive values. Omit the “$” sign in your response.)
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CLARK COMPANY |
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Bank statement balance |
$ |
Book balance |
$ |
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Add: |
Add: |
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Deduct: |
Deduct: |
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$ |
$ |
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Adjusted bank balance |
$ |
Adjusted book balance |
$ |
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Problem 8-4A Part 2
Prepare the journal entries necessary to bring the company s book balance of cash into conformity with the reconciled cash balance as of July 31, 2011. (Omit the “$” sign in your response.)
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Date |
General Journal |
Debit |
Credit |
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July 31 |
Problem 8-5A Prepare a bank reconciliation and record adjustments L.O. P3
[The following information applies to the questions displayed below.]
Els Company most recently reconciled its bank statement and book balances of cash on August 31 and it reported two checks outstanding, No. 5888 for $1,038.05 and No. 5893 for $484.25. The following information is available for its September 30, 2011, reconciliation.
From the September 30 Bank Statement
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PREVIOUS BALANCE |
TOTAL CHECKS AND DEBITS |
TOTAL DEPOSITS AND CREDITS |
CURRENT BALANCE |
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16,800.45 |
9,620.05 |
11,182.85 |
18,363.25 |
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CHECKS AND DEBITS |
DEPOSITS AND CREDITS |
DAILY BALANCE |
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Date |
Amount |
Date |
Amount |
Date |
Amount |
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09/03 |
5888 |
1,038.05 |
09/05 |
1,103.75 |
08/31 |
16,800.45 |
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09/04 |
5902 |
731.90 |
09/12 |
2,226.90 |
09/03 |
15,762.40 |
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09/07 |
5901 |
1824.25 |
09/21 |
4,093.00 |
09/04 |
15,030.50 |
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09/17 |
588.25 NSF |
09/25 |
2,351.70 |
09/05 |
16,134.25 |
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09/20 |
5905 |
937.00 |
09/30 |
22.50 IN |
09/07 |
14,310.00 |
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09/22 |
5903 |
399.10 |
09/30 |
1,385.00 CM |
09/12 |
16,536.90 |
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09/22 |
5904 |
2,080.00 |
09/17 |
15,948.65 |
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09/28 |
5907 |
213.85 |
09/20 |
15,011.65 |
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09/29 |
5909 |
1,807.65 |
09/21 |
19,104.65 |
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09/22 |
16,625.55 |
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09/25 |
18,977.25 |
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09/28 |
18,763.40 |
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09/29 |
16,955.75 |
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09/30 |
18,363.25 |
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From Els Company s Accounting Records
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Cash Receipts Deposited |
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Date |
Cash |
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Sept. 5 |
1,103.75 |
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12 |
2,226.90 |
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21 |
4,093.00 |
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25 |
2,351.70 |
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30 |
1,582.75 |
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11,358.10 |
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Cash Disbursements |
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Check No. |
Cash |
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5901 |
1,824.25 |
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5902 |
731.90 |
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5903 |
399.10 |
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5904 |
2,050.00 |
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5905 |
937.00 |
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5906 |
859.30 |
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5907 |
213.85 |
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5908 |
276.00 |
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5909 |
1,807.65 |
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9,099.05 |
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Cash |
Acct. No. 101 |
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Date |
Explanation |
PR |
Debit |
Credit |
Balance |
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Aug. 31 |
Balance |
15,278.15 |
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Sept. 30 |
Total receipts |
R12 |
11,358.10 |
26,636.25 |
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30 |
Total disbursements |
D23 |
9,099.05 |
17,537.20 |
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Additional Information
Check No. 5904 is correctly drawn for $2,080 to pay for computer equipment; however, the recordkeeper misread the amount and entered it in the accounting records with a debit to Computer Equipment and a credit to Cash of $2,050. The NSF check shown in the statement was originally received from a customer, S. Nilson, in payment of her account. Its return has not yet been recorded by the company. The credit memorandum is from the collection of a $1,400 note for Els Company by the bank. The bank deducted a $15 collection fee. The collection and fee are not yet recorded.
Problem 8-5A Part 1
Required:
Prepare the September 30, 2011, bank reconciliation for this company. (Round your answers to 2 decimal places. Input all amounts as positive values. Omit the “$” sign in your response.)
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ELS COMPANY |
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Bank statement balance |
$ |
Book balance |
$ |
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Add: |
Add: |
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$ |
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Deduct: |
Deduct: |
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$ |
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Adjusted bank balance |
$ |
Adjusted book balance |
$ |
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Problem 8-5A Part 2
Prepare the journal entries to adjust the book balance of cash to the reconciled balance. (Round your answers to 2 decimal places. Omit the “$” sign in your response.)
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Date |
General Journal |
Debit |
Credit |
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Sept. 30 |
AND CHAPTER TEST EXAMPLE SUBMITTED AS DOC:
PROBLEM #1 22 points
Greenview Food Store developed the following information in recording its bank statement for the month of March 20XX.
Balance per books on March 31 $ 829
Balance per bank on March 31 $ 7,030
1) Checks written in March but still outstanding, $5,200.
2) Checks written in February but still outstanding, $1,200.
3) Deposits of March 30 and 31 not yet recorded by bank, $3,100.
4) NSF check of customer returned by bank, $400.
5) Check #210 for $675 was correctly issued and paid by the bank but incorrectly entered in the cash payments journal as payment on account for $657, for payment to a creditor.
6) Bank service charge for March was $31.
7) A payment on account was incorrectly entered into the cash payments journal and posted to the accounts payable subsidiary ledger for $854 when check #318 was correctly prepared for $584. The check cleared the bank in March.
8) The bank collected a note receivable for the company for $3,000 plus $80 interest.
Instructions:
a) Prepare a bank reconciliation for the Greenview Food Store for the month of March 31, 20XX.
b) Journalize the adjusting entries for Greenview Food Store on March 31, 20XX.
Bank Reconciliation:
Journal Entries:
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General Journal |
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Date |
Description |
Debit |
Credit |
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PROBLEM #2 18 points
Jenrob Company completed the following selected transactions during January 20XX.
January 1 Established a petty cash fund of $500
15 The cash sales for the day per the register tape were $3,018.
The actual cash received from cash sales were $3,011.
31 Petty cash on hand was $123. Replenished the petty cash fund for the following
disbursements:
Jan 2 Office supplies, $45
10 Postage due on letter, $29 (Miscellaneous Expense)
14 Office supplies, $56.
17 Postage stamps, $42 (Office Supplies).
20 Express charges on merchandise sold, $136 (Delivery Expense).
22 Repair to desk, $63 (Miscellaneous Expense).
30 Office supplies, $12.
31 The cash sales for the day per the register tape were $2,812.
The actual cash received from cash sales were $2,822.
31 Decreased the petty cash fund by $100.
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General Journal |
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Date |
Description |
Debit |
Credit |
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What is the balance in the cash short/over account (DR or CR & $ amount)? Is it a revenue or an expense?
Balance in Cash Short/Over? ______________________________
Revenue or Expense? ____________________________________