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a) Prepare the journal entries to establish the petty cash fund on March 5. b) Prepare the journal entries to reimburse the fund and to increase petty cash. Hint: there will be a CASH OVER & SHORT account in this case.

a) Prepare the journal entries to establish the petty cash fund on March 5. b) Prepare the journal entries to reimburse the fund and to increase petty cash. Hint: there will be a CASH OVER & SHORT account in this case.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Blues Music Center had the following petty cash transactions in March of the current year. March 5 Wrote a $250 check, cashed it, and gave the proceeds and the petty cashbox to Jen Rouse, the petty cashier. 6 Paid $12.50 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Blues uses the perpetual system to account for merchandise inventory. 11 Paid $10.75 delivery charges on merchandise sold to a customer, terms FOB destination. 12 Purchased file folders for $14.13 that are immediately used. 14 Reimbursed Bob Geldof, the manager, $11.65 for office supplies purchased and used. 18 Purchased printer paper for $20.54 that is immediately used. 27 Paid $45.10 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. 28 Paid postage expenses of $18. 30 Reimbursed Geldof $56.80 for business car mileage. 31 Cash of $61.53 remained in the fund. Sorted the petty cash receipts by accounts affected and exchanged them for a check to reimburse the fund for expenditures. 31 The petty cash fund amount is increased by $50 to a total of $300. Required: a) Prepare the journal entries to establish the petty cash fund on March 5. b) Prepare the journal entries to reimburse the fund and to increase petty cash. Hint: there will be a CASH OVER & SHORT account in this case.
Transcribed Image Text:Blues Music Center had the following petty cash transactions in March of the current year. March 5 Wrote a $250 check, cashed it, and gave the proceeds and the petty cashbox to Jen Rouse, the petty cashier. 6 Paid $12.50 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Blues uses the perpetual system to account for merchandise inventory. 11 Paid $10.75 delivery charges on merchandise sold to a customer, terms FOB destination. 12 Purchased file folders for $14.13 that are immediately used. 14 Reimbursed Bob Geldof, the manager, $11.65 for office supplies purchased and used. 18 Purchased printer paper for $20.54 that is immediately used. 27 Paid $45.10 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. 28 Paid postage expenses of $18. 30 Reimbursed Geldof $56.80 for business car mileage. 31 Cash of $61.53 remained in the fund. Sorted the petty cash receipts by accounts affected and exchanged them for a check to reimburse the fund for expenditures. 31 The petty cash fund amount is increased by $50 to a total of $300. Required: a) Prepare the journal entries to establish the petty cash fund on March 5. b) Prepare the journal entries to reimburse the fund and to increase petty cash. Hint: there will be a CASH OVER & SHORT account in this case.
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