Bill Jovi is reviewing the cash accounting for Nottleman, Inc., a local mailing service. Jovi’s review will focus on the petty cash account and the bank reconciliation for the month ended May 31, 2014. He has collected the following information from Nottleman’s bookkeeper for this task.

Petty Cash
  1. The petty cash fund was established on May 10, 2014, in the amount of $250.
  2. Expenditures from the fund by the custodian as of May 31, 2014, were evidenced by approved receipts for the following.

Postage expense                                         $33.00
Mailing labels and other supplies                65.00
I.O.U. from employees                                 30.00
Shipping charges (to customer)                   57.45
Newspaper advertising                                22.80
Miscellaneous expense                                15.35

On May 31, 2014, the petty cash fund was replenished and increased to $300; currency and coin in the fund at that time totaled $26.40.

                            

Nottleman’s Cash Account
Balance, May 1, 2014                                 $ 8,850
Deposits during May 2014                          31,000
Checks written during May 2014               (31,835)

Deposits in transit are determined to be $3,000, and checks outstanding at May 31 total $850. Cash on hand (besides petty cash) at May 31, 2014, is $246.

Instructions
  (a) Prepare the journal entries to record the transactions related to the petty cash fund for May.
  (b) Prepare a bank reconciliation dated May 31, 2014, proceeding to a correct cash balance, and prepare the journal entries necessary to make the books correct and complete.
  (c) What amount of cash should be reported in the May 31, 2014, balance sheet?