John Saldanha is the owner and manager of The Car Spa. The Car Spa provides various car wash and car detailing services. The Car Spa also sells snacks and gift items in its waiting area. The Car Spa has one cash register, where all payments from customers are received. There is a $450 change fund in the cash register at the beginning of each day. There are two cash register clerks, Greg and Anna, who work two different shifts during the day. John is quite busy as the owner and operator of the car wash and trusts Greg and Anna completely. John does not see the need to count out the cash register drawers with Greg or Anna after their shifts are ended. Additionally, John prints out a cash register tape at the end of the day but does not compare it to the deposit. During the first week of August, John noticed an increase in business. However, the cash deposits to the bank were less than John expected. He has contacted you for advice. You have compiled the sales per the cash register tapes, and the cash counts, for the period from August 1 to August 7. 

These amounts are as follows:

1. Calculate the total amount of cash sales and cash shortages for the period August 1 to August 7.
2. Prepare a journal entry dated August 7 that summarizes the cash sales and cash shortages from August 1 to August 7.
3. What changes in procedures would you recommend to provide better control over cash receipts?

Transcribed Image Text:

Date August 1 August 2 August 3 August 4 August 5 August 6 August 7 Sales, per the Cash Register Tape $2,221.25 $2,140.80 $2,303.45 $2,287.30 $2,335.45 $2,161.90 $2,256.40 Cash Count $2,488.50 $2,350.40 $2,471.45 $2,597.20 $2,644.05 $2,460.30 $2,491.10