FUNDAMENTAL ACCOUNTING PRINCIPLES
FUNDAMENTAL ACCOUNTING PRINCIPLES
24th Edition
ISBN: 9781264044375
Author: Wild
Publisher: McGraw-Hil
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Chapter 8, Problem 3APSA

Requirement-1:

To determine

To prepare:

The Journal entries for the establishment of the petty cash fund

Requirement-1:

Expert Solution
Check Mark

Explanation of Solution

The Journal entry for the establishment of the petty cash fund is as follows:

    Nakashima Gallery
    Petty Cash Fund
    Journal Entries




    Date Accounts titles and Explanation Debit Credit




    Feb. 2
    Petty cash
    $ 400.00


    Cash

    $ 400.00

    (Being Petty cash fund established)


Requirement-2:

To determine

To prepare:

The Petty Cash payments report for the month of February

Requirement-2:

Expert Solution
Check Mark

Explanation of Solution

The Petty Cash payments report for the month of February is as follows:

    Nakashima Gallery
    Petty Cash Payments Report
    For the month of February
    Reconciliation Replenish Amount
    Fund Total (A)$ 400.00
    Payments:




    Office Supplies Expenses (14.15+67.77)
    $ 81.92


    Merchandise Inventory (32.5+13.10)
    $ 45.60


    Delivery Expenses
    $ 7.95


    Mileage Expenses
    $ 68.00


    Postage Expenses (20+54)
    $ 74.00


    Total Payments (B)$ 277.47 $277.47
    Recorded Amount on Hand (C) =A-B =

    $ 122.53

    Actual Amount on Hand (D)$ 120.42
    Cash Short/Over (E) = (C-D)

    $ 2.11
    $ 2.11
    Amount to replenish = C+E=$279.58

Requirement-3(a):

To determine

To prepare:

The journal entry for the replenishment of the petty cash fund

Requirement-3(a):

Expert Solution
Check Mark

Explanation of Solution

The journal entry for the replenishment of the petty cash fund is as follows:

    Nakashima Gallery
    Petty Cash Fund
    Journal Entries
    Date Accounts titles and Explanation Debit Credit




    Feb. 28
    Office Supplies Expenses (14.15+67.77)
    $ 81.92


    Merchandise Inventory (32.5+13.10)
    $ 45.60


    Delivery Expenses
    $ 7.95


    Mileage Expenses
    $68.00


    Postage Expenses (20+54)
    $ 74.00


    Cash Short/Over (Balancing Figure)
    $ 2.11


    Cash (400-120.42)

    $ 279.58

    (Being Petty cash fund replenished)


Requirement-3(b):

To determine

To prepare:

The journal entry for the increase in the petty cash fund

Requirement-3(b):

Expert Solution
Check Mark

Explanation of Solution

The journal entry for the increase in the petty cash fund is as follows:

    Nakashima Gallery
    Petty Cash Fund
    Journal Entries
    Date Accounts titles and Explanation Debit Credit




    Feb. 28
    Petty cash
    $ 100.00


    Cash

    $ 100.00

    (Being Petty cash fund raised)


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