Concept explainers
1.
Introduction: Petty cash of the company is the cash reserved by the company for small amount of transactionsin other words Petty cash fund refers to the small portion of the cash fund used or to manage small expenses where payment cannot be made by cheques all the time.
To prepare: The
1.
Answer to Problem 3PSA
The journal entry established the petty cash is prepared below.
Explanation of Solution
1. Journal entry of petty cash in the last month of company’s fiscal year is as following:
Date | Particulars | Debit $ | Credit $ |
2 Feb | Petty cash | 400.00 | |
To Cash | 400.00 | ||
(Being petty cash fund recorded) |
2
Introduction: Petty cash of the company is the cash reserved by the company for small amount of transactions in other words Petty cash fund refers to the small portion of the cash fund used or to manage small expenses where payment cannot be made by cheques all the time.
To prepare:Petty cash payment report for the month of February..
2
Answer to Problem 3PSA
The journal entry to establish the petty cash is prepared below.
Explanation of Solution
Journal entry of petty cash payment report of the company is as follows:
Date | Particulars | Debit $ | Credit $ |
23 Feb | Delivery of customer’s merchandise | 20.00 | |
To Cash | 20.00 | ||
(Being Delivery expenses recorded) | |||
14 Feb | Reimbursement for mileage | 68.00 | |
To Cash | 68.00 | ||
(Being mileage expenses recorded) | |||
12 Feb | Express delivery of contract | 7.95 | |
27 Feb | Purchased postage stamps | 54.00 | |
To Cash | 61.95 | ||
(Being postage expenses recorded) | |||
9 Feb | COD charges on purchases | 32.50 | |
25 Feb | COD charges on purchase | 13.10 | |
To Cash | 45.60 | ||
(Being Merchandise inventory recorded) | |||
5 Feb | Purchased paper for copier | 14.15 | |
Purchased stationery | 67.77 | ||
To Cash | 81.92 | ||
(Being office supplies expenses recorded) | |||
3.
Introduction: Petty cash of the company is the cash reserved by the company for small amount of transactions in other words Petty cash fund refers to the small portion of the cash fund used or to manage small expenses where payment cannot be made by cheques all the time.
To prepare: The journal entry to reimburse and increase the fund account.
3.
Answer to Problem 3PSA
The journal entry to reimburse and increase the fund account is prepared below.
Explanation of Solution
Journal entries for reimbursement and increase in fund amount are as follows:
a. | 28 Feb | Delivery expenses | 20.00 | |
Mileage expenses | 68.00 | |||
Postage expenses | 61.95 | |||
Merchandise Inventory | 45.60 | |||
Office Supplies expenses | 81.92 | |||
Cash over and short | 2.11 | |||
To Cash | 279.58 | |||
(Being petty cash fund reimbursed) | ||||
b. | 28 Feb | Petty cash | 100.00 | |
To Cash | 100.00 | |||
(Being petty cash fund increased to $500) |
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Chapter 6 Solutions
Financial Accounting: Information for Decisions
- Catherines Cookies has a beginning balance in the Accounts Payable control total account of $8,200. In the cash disbursements journal, the Accounts Payable column has total debits of $6,800 for November. The Accounts Payable credit column in the purchases journal reveals a total of $10,500 for the current month. Based on this information, what is the ending balance in the Accounts Payable account in the general ledger?arrow_forwardEnter the following transactions in a cash payments journal like the one illustrated in the chapter: Aug. 2 Issued Check No. 193 in payment of August rent (Rent Expense), 2,200. 6 Issued Check No. 194 to Mason Hardware in payment of merchandise purchased on account, 1,700, less 2% discount. The check was written for 1,666. 10 Issued Check No. 195 to Augies Wholesale for cash purchase of merchandise, 2,730.arrow_forwardThe following transactions were completed by Hammond Auto Supply during January, which is the first month of this fiscal year. Terms of sale are 2/10, n/30. The balances of the accounts as of January 1 have been recorded in the general ledger in your Working Papers or in CengageNow. Hammond Auto Supply does not track cash sales by customer. If you are using the form-based approach with QuickBooks or general ledger, select Cash Sales as the customer for all cash sales transactions. Required 1. Record the transactions for January using a sales journal, page 73; a purchases journal, page 56; a cash receipts journal, page 38; a cash payments journal, page 45; and a general journal, page 100. Assume the periodic inventory method is used. 2. Post daily all entries involving customer accounts to the accounts receivable ledger. 3. Post daily all entries involving creditor accounts to the accounts payable ledger. 4. Post daily those entries involving the Other Accounts columns and the general journal to the general ledger. Write the owners name in the Capital and Drawing accounts. 5. Add the columns of the special journals and prove the equality of the debit and credit totals on scratch paper. 6. Post the appropriate totals of the special journals to the general ledger. 7. Prepare a trial balance. 8. Prepare a schedule of accounts receivable and a schedule of accounts payable. Do the totals equal the balances of the related controlling accounts?arrow_forward
- The following transactions were completed by Hammond Auto Supply during January, which is the first month of this fiscal year. Terms of sale are 2/10, n/30. The balances of the accounts as of January 1 have been recorded in the general ledger in your Working Papers or in CengageNow. Hammond Auto Supply does not track cash sales by customer. If you are using the form-based approach with QuickBooks or general ledger, select Cash Sales as the customer for all cash sales transactions. Required 1. Record the transactions for January using a general journal, page 1. Assume the periodic inventory method is used. If using QuickBooks, record transactions using either the journal entry method or the forms-based approach as directed by your instructor. The chart of accounts is as follows: 2. Post daily all entries involving customer accounts to the accounts receivable ledger. 3. Post daily all entries involving creditor accounts to the accounts payable ledger. 4. Post daily the general journal entries to the general ledger. Write the owners name in the Capital and Drawing accounts. If using QuickBooks or general ledger, ignore Steps 2, 3, and 4. 5. Prepare a trial balance. 6. Prepare a schedule of accounts receivable (A/R Aging Detail report in QuickBooks) and a schedule of accounts payable (A/P Summary Detail report in QuickBooks). Do the totals equal the balances of the related controlling accounts?arrow_forwardNakashima Gallery had the following petty cash transactions in February of the current year. Feb. 2 Wrote a $340 check, cashed it, and gave the proceeds and the petty cashbox to Chloe Addison, the petty cashier. 5 Purchased bond paper for the copier for $16.55 that is immediately used. 9 Paid $44.50 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Nakashima uses the perpetual system to account for merchandise inventory. 12 Paid $8.75 postage to express mail a contract to a client. 14 Reimbursed Adina Sharon, the manager, $74 for business mileage on her car. 20 Purchased stationery for $68.77 that is immediately used. 23 Paid a courier $23 to deliver merchandise sold to a customer, terms FOB destination. 25 Paid $11.10 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. 27 Paid $51 for postage expenses. 28 The fund had $22.81 remaining in…arrow_forwardNakashima Gallery had the following petty cash transactions in February of the current year. 2 Wrote a $350 check, cashed it, and gave the proceeds and the petty cashbox to Chloe Addison, the petty cashier. 5 Purchased bond paper for the copier for $14.95 that is immediately used. 9 Paid $40.50 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Nakashima uses the perpetual system to account for merchandise inventory. 12 Paid $7.75 postage to express mail a contract to a client. 14 Reimbursed Adina Sharon, the manager, $72 for business mileage on her car. 20 Purchased stationery for $68.77 that is immediately used. 23 Paid a courier $23 to deliver merchandise sold to a customer, terms FOB destination. 25 Paid $10.60 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. 27 Paid $51 for postage expenses. 28 The fund had $23.36 remaining in the petty cash box. Sorted the petty cash receipts by accounts affected and exchanged…arrow_forward
- Nakashima Gallery had the following petty cash transactions in February of the current year. Nakashima uses the perpetual system to account for merchandise inventory. Feb. 2 Wrote a $400 check to establish a petty cash fund. 5 Purchased paper for the copier for $14.15 that is immediately used. 9 Paid $32.50 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. 12 Paid $7.95 postage to deliver a contract to a client. 14 Reimbursed Adina Sharon, the manager, $68 for mileage on her car. 20 Purchased office paper for $67.77 that is immediately used. 23 Paid a courier $20 to deliver merchandise sold to a customer, terms FOB destination. 25 Paid $13.10 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. 27 Paid $54 for postage expenses. 28 The fund had $120.42 remaining in the petty cashbox. Sorted the…arrow_forwardNakashima Gallery had the following petty cash transactions in February of the current year. Nakashima uses the perpetual system to account for merchandise inventory. Feb. 2 Wrote a $350 check to establish a petty cash fund. 5 Purchased paper for the copier for $15.15 that is immediately used. 9 Paid $42.50 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. 12 Paid $8.55 postage to deliver a contract to a client. 14 Reimbursed Adina Sharon, the manager, $71 for mileage on her car. 20 Purchased office paper for $68.77 that is immediately used. 23 Paid a courier $16 to deliver merchandise sold to a customer, terms FOB destination. 25 Paid $11.70 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. 27 Paid $53 for postage…arrow_forwardNakashima Gallery had the following petty cash transactions in February of the current year. Nakashima uses the perpetual system to account for merchandise inventory. Feb. 2 Wrote a $360 check to establish a petty cash fund. 5 Purchased paper for the copier for $16.15 that is immediately used. 9 Paid $44.50 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. 12 Paid $7.35 postage to deliver a contract to a client. 14 Reimbursed Adina Sharon, the manager, $70 for mileage on her car. 20 Purchased office paper for $68.77 that is immediately used. 23 Paid a courier $20 to deliver merchandise sold to a customer, terms FOB destination. 25 Paid $11.60 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. 27 Paid $57 for postage…arrow_forward
- Nakashima Gallery had the following petty cash transactions in February of the current year. Nakashima uses the perpetual system to account for merchandise inventory. 2 Mrote a 5340 check to establish a petty cash fund. 5 Purchased paper for the copier for $15.35 that is immediately used. 9 Paid $34.50 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. 12 Paid $8.35 postage to deliver a contract to a client. 14 Reimbursed Adina Sharon, the manager, $75 tor mileage on her car. 20 Purchased office paper for $67.77 that is immediately used. 23 Paid a courier $16 to deliver merchandise sold to a customer, terms POB destination. 25 Paid $11.80 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. 27 Paid $51 for postage expenses. 28 The fund had $21.72 remaining in the petty cashbox. Sorted the petty…arrow_forwardNakashima Gallery had the following petty cash transactions in February of the current year. Nakashima uses the perpetual system to account for merchandise inventory. February 2 Wrote a $350 check to establish a petty cash fund. February 5 February 9 Purchased paper for the copier for $16.55 that is immediately used. Paid $34.50 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. Paid $8.85 postage to deliver a contract to a client. February 12 February 14 Reimbursed Adina Sharon, the manager, $65 for mileage on her car. February 20 Purchased office paper for $69.77 that is immediately used. February 23 Paid a courier $19 to deliver merchandise sold to a customer, terms FOB destination. February 25 Paid $11.60 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. February 27 Paid $52 for postage…arrow_forwardNakashima Gallery had the following petty cash transactions in February of the current year. Nakashima uses the perpetual system to account for merchandise inventory. February 2 Wrote a $360 check to establish a petty cash fund. February 5 Purchased paper for the copier for $14.75 that is immediately used. February 9 Paid $36.50 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. February 12 Paid $7.35 postage to deliver a contract to a client February 14 Reimbursed Adina Sharon, the manager, $70 for mileage on her car February 28 Purchased office paper for $67.77 that is immediately used. February 23 Paid a courier $18 to deliver merchandise sold to a customer, terms FOB destination. February 25 Paid $11.50 shipping charges (transportation-in) on merchandise purchased for resale, terms FOB shipping point. These costs are added to merchandise inventory. February 27 Paid $56 for postage…arrow_forward
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