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Chen Company established a $500 petty cash fund on January 1, Year 1. Required a. Is the establishment of the petty cash fund an asset source, use, or exchange transaction? o. Show the establishment of the petty cash fund in a horizontal statements model like the following one: c. Record the establishment of the fund in general journal format. Complete this question by entering your answers in the tabs below. Required A Required B Required C Show the establishment of the petty cash fund in a horizontal statements model like the following one: (In the Cash Flow column, use the initials OA to designate operat activity, IA for investing activity, FA for financing activity, and NA for not affected. Enter any decreases to account balances with a minus sign.) CHEN COMPANY Statements Model Cash Flow Stockholders" Liabilities Revenue Expense Net Income %3D Assets Equity Cash Petty Cash < Required A Required C

Chen Company established a $500 petty cash fund on January 1, Year 1. Required a. Is the establishment of the petty cash fund an asset source, use, or exchange transaction? o. Show the establishment of the petty cash fund in a horizontal statements model like the following one: c. Record the establishment of the fund in general journal format. Complete this question by entering your answers in the tabs below. Required A Required B Required C Show the establishment of the petty cash fund in a horizontal statements model like the following one: (In the Cash Flow column, use the initials OA to designate operat activity, IA for investing activity, FA for financing activity, and NA for not affected. Enter any decreases to account balances with a minus sign.) CHEN COMPANY Statements Model Cash Flow Stockholders" Liabilities Revenue Expense Net Income %3D Assets Equity Cash Petty Cash < Required A Required C

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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**Journal Entry Worksheet** --- ### Journal Entry for Petty Cash Fund **Instruction:** - Record entry for petty cash fund. **Note:** - Enter debits before credits. --- | Date | General Journal | Debit | Credit | |-----------|--------------------------------------|-------|--------| | Jan 01 | | | | | | | | | | | | | | | | | | | --- **Options:** - **Record entry**: Click to save the current entry. - **Clear entry**: Click to clear the current data and start again. - **View general journal**: Click to see the complete general journal. --- In this worksheet, users are prompted to record the entry for a petty cash fund on January 1st. The table provided includes columns for the date, general journal details, debits, and credits. Users should ensure that debits are entered before credits. There are also buttons to record the entry, clear the current entry, and view the general journal for review or reference.
Transcribed Image Text:**Journal Entry Worksheet** --- ### Journal Entry for Petty Cash Fund **Instruction:** - Record entry for petty cash fund. **Note:** - Enter debits before credits. --- | Date | General Journal | Debit | Credit | |-----------|--------------------------------------|-------|--------| | Jan 01 | | | | | | | | | | | | | | | | | | | --- **Options:** - **Record entry**: Click to save the current entry. - **Clear entry**: Click to clear the current data and start again. - **View general journal**: Click to see the complete general journal. --- In this worksheet, users are prompted to record the entry for a petty cash fund on January 1st. The table provided includes columns for the date, general journal details, debits, and credits. Users should ensure that debits are entered before credits. There are also buttons to record the entry, clear the current entry, and view the general journal for review or reference.
### Establishing a Petty Cash Fund **Scenario:** Chen Company established a $500 petty cash fund on January 1, Year 1. ### Required Tasks **a.** Determine if the establishment of the petty cash fund is an asset source, use, or exchange transaction. **b.** Show the establishment of the petty cash fund in a horizontal statements model. **c.** Record the establishment of the fund in general journal format. #### Task A **Question:** Is the establishment of the petty cash fund an asset source, use, or exchange transaction? #### Task B **Instructions:** Show the establishment of the petty cash fund in a horizontal statements model like the following one: *Note:* In the Cash Flow column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity, and NA for not affected. Enter any decreases to account balances with a minus sign. #### Horizontal Statements Model: \[ \begin{array}{|c|c|c|c|c|c|c|c|} \hline \text{CHEN COMPANY} & & \text{Assets} & & = & \text{Liabilities} & + & \text{Stockholders' Equity} & & & \text{Revenue} & - & \text{Expense} & = & \text{Net Income} & & \text{Cash Flow} \\ \hline & & \text{Cash} \quad & & \text{Petty Cash} \quad & & & & & & & & & & & & \\ \hline \end{array} \] **Example:** - **Assets:** Cash \(-\$500\), Petty Cash \(+\$500\) - **Liabilities:** No change - **Stockholders' Equity:** No change - **Revenue:** No change - **Expense:** No change - **Net Income:** No change - **Cash Flow:** \(\text{OA} -\$500\) #### Task C **Instructions:** Record the establishment of the fund in general journal format. **Journal Entry:** ``` Date: January 1, Year 1 Account Debit Credit ----------------------------------------- Petty Cash $500 Cash $500 ``` This entry establishes a petty cash fund by transferring $500 from the Cash account to the Petty Cash account.
Transcribed Image Text:### Establishing a Petty Cash Fund **Scenario:** Chen Company established a $500 petty cash fund on January 1, Year 1. ### Required Tasks **a.** Determine if the establishment of the petty cash fund is an asset source, use, or exchange transaction. **b.** Show the establishment of the petty cash fund in a horizontal statements model. **c.** Record the establishment of the fund in general journal format. #### Task A **Question:** Is the establishment of the petty cash fund an asset source, use, or exchange transaction? #### Task B **Instructions:** Show the establishment of the petty cash fund in a horizontal statements model like the following one: *Note:* In the Cash Flow column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity, and NA for not affected. Enter any decreases to account balances with a minus sign. #### Horizontal Statements Model: \[ \begin{array}{|c|c|c|c|c|c|c|c|} \hline \text{CHEN COMPANY} & & \text{Assets} & & = & \text{Liabilities} & + & \text{Stockholders' Equity} & & & \text{Revenue} & - & \text{Expense} & = & \text{Net Income} & & \text{Cash Flow} \\ \hline & & \text{Cash} \quad & & \text{Petty Cash} \quad & & & & & & & & & & & & \\ \hline \end{array} \] **Example:** - **Assets:** Cash \(-\$500\), Petty Cash \(+\$500\) - **Liabilities:** No change - **Stockholders' Equity:** No change - **Revenue:** No change - **Expense:** No change - **Net Income:** No change - **Cash Flow:** \(\text{OA} -\$500\) #### Task C **Instructions:** Record the establishment of the fund in general journal format. **Journal Entry:** ``` Date: January 1, Year 1 Account Debit Credit ----------------------------------------- Petty Cash $500 Cash $500 ``` This entry establishes a petty cash fund by transferring $500 from the Cash account to the Petty Cash account.
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