1. On October 1, 2013, Wesley Company establishes an imprest petty cash fund by
ID: 2466124 • Letter: 1
Question
1.
On October 1, 2013, Wesley Company establishes an imprest petty cash fund by issuing a check for $200 to Mary Mann, the custodian of the petty cash fund. On October 31, 2013, Mary Mann submitted the following paid petty cash receipts for replenishment of the petty cash fund when there is $9 cash in the fund:
Freight-in
$28
Supplies Expense
80
Entertainment of Clients
60
Postage Expense
22
Instructions
Prepare the journal entries required to establish the petty cash fund on October 1 and the replenishment of the fund on October 31.
2.
Higgins Boat Company's bank statement for the month of September showed a balance per bank of $9,161. The company's Cash account in the general ledger had a balance of $5,096 at September 30. Other information is as follows:
(1)
Cash receipts for September 30 recorded on the company's books were $3,050
but this amount does not appear on the bank statement.
(2)
The bank statement shows a debit memorandum for $40 for check printing charges.
(3)
Check No. 119 payable to Nolan Company was recorded in the cash payments
journal and cleared the bank for $548. A review of the accounts payable subsidiary ledger shows a $36 credit balance in the account of Nolan Company and that the payment to them should have been for $584.
(4)
The total amount of checks still outstanding at September 30 amounted to $5,400.
(5)
Check No. 138 was correctly written and paid by the bank for $227.
The cash payment journal reflects an entry for Check No. 138 as a debit to Accounts Payable and a credit to Cash in Bank for $272.
(6)
The bank returned an NSF check from a customer for $360.
(7)
The bank included a credit memorandum for $2,070 which represents collection of a customer's note by the bank for the company; principal amount of the note was
$1,800 and interest was $270. Interest has not been accrued.
Instructions
(a)
Prepare a bank reconciliation for Higgins Boat Company at September 30.
(b)
Prepare any adjusting entries necessary as a result of the bank reconciliation.
1.
On October 1, 2013, Wesley Company establishes an imprest petty cash fund by issuing a check for $200 to Mary Mann, the custodian of the petty cash fund. On October 31, 2013, Mary Mann submitted the following paid petty cash receipts for replenishment of the petty cash fund when there is $9 cash in the fund:
Freight-in
$28
Supplies Expense
80
Entertainment of Clients
60
Postage Expense
22
Instructions
Prepare the journal entries required to establish the petty cash fund on October 1 and the replenishment of the fund on October 31.
Explanation / Answer
1.
Dr. Petty cash fund $200
Cr. Cash $200
(To record the establishment of a petty cash fund)
Dr. Supplies Expense $80
Dr. Freight-in $28
Dr. Entertainment of Clients $60
Dr. Postage Expense $22
Dr. Shortage $1
Cr. Cash $191
(To record the replenishment of the petty cash fund)
2.
(a)
(b)
Dr Miscellaneous expense $40
Cr Cash $40
Dr Cash $45
Cr Accounts payable $45
Dr Accounts receivable $360
Cr Cash $360
Dr Cash $2,070
Cr Note receivable $1,800
Cr Interest revenue $270
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