Waupaca Company establishes a $410 petty cash fund on September 9. On September 30, the fund shows
Question:
- Waupaca Company establishes a $410 petty cash fund on September 9. On September 30, the fund shows $160 in cash along with receipts for the following expenditures: transportation-in, $51; postage expenses, $50; and miscellaneous expenses, $146. The petty cashier could not account for a $3 shortage in the fund. The company uses the perpetual system in accounting for merchandise inventory.
Prepare (1) the September 9 entry to establish the fund, (2) the September 30 entry to reimburse the fund, and (3) an October 1 entry to increase the fund to $475.
2. Palmona Company establishes a $300 petty cash fund on January 1. On January 8, the fund shows $201 in cash along with receipts for the following expenditures: postage, $40; transportation-in, $14; delivery expenses, $16; and miscellaneous expenses, $29. Palmona uses the perpetual system in accounting for merchandise inventory.
- Prepare the entry to establish the fund on January 1.
- Prepare the entry to reimburse the fund on January 8 under two separate situations:
- To reimburse the fund.
- To reimburse the fund and increase it to $350. Hint: Make two entries.
3. [The following information applies to the questions displayed below.]
DEL Gato Clinic's cash account shows an $14,564 debit balance and its bank statement shows $14,508 on deposit at the close of business on June 30.
- Outstanding checks as of June 30 total $2,440.
- The June 30 bank statement lists a $25 bank service charge.
- Check No. 919, listed with the canceled checks, was correctly drawn for $789 in payment of a utility bill on June 15. Del Gato Clinic mistakenly recorded it with a debit to Utilities Expense and a credit to Cash in the amount of $798.
- The June 30 cash receipts of $2,480 were placed in the bank's night depository after banking hours and were not recorded on the June 30 bank statement.
4. Wright Company's cash account shows a $28,100 debit balance and its bank statement shows $26,400 on deposit at the close of business on May 31.
- The May 31 bank statement lists $130 in bank service charges; the company has not yet recorded the cost of these services.
- Outstanding checks as of May 31 total $5,900.
- May 31 cash receipts of $6,500 were placed in the bank's night depository after banking hours and were not recorded on the May 31 bank statement.
- In reviewing the bank statement, a $430 check written by Smith Company was mistakenly drawn against Wright's account.
- The bank statement shows a $540 NSF check from a customer; the company has not yet recorded this NSF check.
Prepare its bank reconciliation using the above information.
Fundamental accounting principle
ISBN: 978-0078025587
21st edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta