BUSINESS STUDIES DEPARTMENTINTERMEDIATE ACCOUNTNG1 (TUTORIAL #1)1. XYZ Co. set up a petty cash fund for payments of small amounts. Thefollowing transactions involving the petty cash fund occurred in May(the last month of the company's fiscal year).May 1 Prepared a company check for $250 to establish the petty cash fund.May 15 Prepared a company check to replenish the fund for the followingexpenditures made since May1:a. Paid $78 for janitorial services.b. Paid $63.68 for miscellaneous expenses.c. Paid postage expenses of $43.50.d. Paid $57.15 to a local newspaper for an advertisement.e. Counted $11.15 remaining in the petty cash box.May 16 Prepared a company check for $200 to increase the fund to $450.May 31 The petty cashier reports that $293.39 cash remains in the fund. Acompany check is drawn to replenish the fund for the following expendituresmade since May 15:a. Paid postage expenses of $48.36.b. Reimbursed the office manager for business mileage, $38.50.c. Paid $39.75 to deliver merchandise to a customer, terms FOBdestination.May 31 The company decides that the May 16 increase in the fund was toolarge. It reduces the fund by $50, leaving a total of $400.RequiredA. Prepare journal entries to establish the fund on May 1, to replenish it onMay 15 and on May 31, and to reflect any increase or decrease in thefund balance on May 16 and May 31.

A petty cash fund refers to a small amount of cash that a company maintains in order to pay off…

Answered: May 1 Prepared a company check for $250…

May 1 Prepared a company check for $250 to establish the petty cash fund. May 15 Prepared a company check to replenish the fund for the following expenditures made since May1:

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter8: Fraud, Internal Controls, And Cash

Section: Chapter Questions

Problem 1PA: On September 1, French company has decided to initiate a petty cash fund in the amount of $800....

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Concept explainers

Cash Book

So, before coming to the topic of cash books, I will let you briefly explain about the cash so that you all can be familiar with the word cash. Cash comes under the category of the current asset which is used as a medium of exchange for all the financial transactions in the firm. Cash is something that is universally accepted as a mode of payment. So, now comes to the topic i.e., cash book.

Question

BUSINESS STUDIES DEPARTMENT
INTERMEDIATE ACCOUNTNG1 (TUTORIAL #1)
1. XYZ Co. set up a petty cash fund for payments of small amounts. The
following transactions involving the petty cash fund occurred in May
(the last month of the company's fiscal year).
May 1 Prepared a company check for $250 to establish the petty cash fund.
May 15 Prepared a company check to replenish the fund for the following
expenditures made since May1:
a. Paid $78 for janitorial services.
b. Paid $63.68 for miscellaneous expenses.
c. Paid postage expenses of $43.50.
d. Paid $57.15 to a local newspaper for an advertisement.
e. Counted $11.15 remaining in the petty cash box.
May 16 Prepared a company check for $200 to increase the fund to $450.
May 31 The petty cashier reports that $293.39 cash remains in the fund. A
company check is drawn to replenish the fund for the following expenditures
made since May 15:
a. Paid postage expenses of $48.36.
b. Reimbursed the office manager for business mileage, $38.50.
c. Paid $39.75 to deliver merchandise to a customer, terms FOB
destination.
May 31 The company decides that the May 16 increase in the fund was too
large. It reduces the fund by $50, leaving a total of $400.
Required
A. Prepare journal entries to establish the fund on May 1, to replenish it on
May 15 and on May 31, and to reflect any increase or decrease in the
fund balance on May 16 and May 31.

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On May 2 Kellie Company has decided to initiate a petty cash fund in the amount of $1,200. Prepare journal entries for the following transactions: A. On July 5, the petty cash fund needed replenishment, and the following are the receipts: Auto Expense $125, Supplies $368, Postage Expense $325, Repairs and Maintenance Expense $99, Miscellaneous Expense $259. The cash on hand at this time was $38. B. On June 14, the petty cash fund needed replenishment, and the following are the receipts: Auto Expense $425, Supplies $95, Postage Expense $240, Repairs and Maintenance Expense $299, Miscellaneous Expense $77. The cash on hand at this time was $80. C. On June 23, the petty cash fund needed replenishment, and the following are the receipts: Auto Expense $251, Supplies $188, Postage Expense $263, Repairs and Maintenance Expense $182, Miscellaneous Expense $203. The cash on hand at this time was $93. D. On June 29, the company determined that the petty cash fund needed to be decreased to $1,000. E. On June 30, the petty cash fund needed replenishment as it was month-end. The following are the receipts: Auto Expense $114, Supplies $75, Postage Expense $50, Repairs and Maintenance Expense $121, Miscellaneous Expense $39. The cash on hand at this time was $603.
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