Lakeland's Business Department completed the following petty cash transactions during luly 2020: 5 Prepared a $500 cheque, cashed it, and turned the proceeds and the petty cash box over to Cassandra Kirkland, the petty cashier. 6 Paid $as COD charges on merchandise purchased for resale. Lokeland uses the perpetual method to account for merchandise inventory. 11 Paid $46 delivery charges on merchandise sold to a customer. 12 Purchased file folders, $38. 18 Purchased paper for printer, 562. 27 Paid $28 COD charges on merchandise purchased for resale. 28 Purchased stamps, $52. 30 Reimbursed John Turvey $125 for business car expenses. 31 Cassandra Kirkland sorted the petty cash receipts by accounts affected and exchanged them for a cheque to reimburse the fund for expenditures. However, there was $105 in cash in the fund. In addition, the size of the petty cash fund was decreased to $400. July Required: 1. Prepare a general journal entry to record establishing the petty cash fund. 2. Prepare a Petty Cash Payments Report similar to Exhibit 7.3 that has these categories: delivery expense, auto expense, postage expense, merchandise inventory, and office supplies. 3. Prepare the general journal entry to record the reimbursement and the decrease of the fund.
Lakeland's Business Department completed the following petty cash transactions during luly 2020: 5 Prepared a $500 cheque, cashed it, and turned the proceeds and the petty cash box over to Cassandra Kirkland, the petty cashier. 6 Paid $as COD charges on merchandise purchased for resale. Lokeland uses the perpetual method to account for merchandise inventory. 11 Paid $46 delivery charges on merchandise sold to a customer. 12 Purchased file folders, $38. 18 Purchased paper for printer, 562. 27 Paid $28 COD charges on merchandise purchased for resale. 28 Purchased stamps, $52. 30 Reimbursed John Turvey $125 for business car expenses. 31 Cassandra Kirkland sorted the petty cash receipts by accounts affected and exchanged them for a cheque to reimburse the fund for expenditures. However, there was $105 in cash in the fund. In addition, the size of the petty cash fund was decreased to $400. July Required: 1. Prepare a general journal entry to record establishing the petty cash fund. 2. Prepare a Petty Cash Payments Report similar to Exhibit 7.3 that has these categories: delivery expense, auto expense, postage expense, merchandise inventory, and office supplies. 3. Prepare the general journal entry to record the reimbursement and the decrease of the fund.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Lakeland's Business Department completed the following petty cash transactions during luly 2020:
5 Prepared a $500 cheque, cashed it, and turned the proceeds and the petty cash box over to
Cassandra Kirkland, the petty cashier.
6 Paid $35 COD charges on merchandise purchased for resale. Lakeland uses the perpetual
method to account for merchandise inventory.
11 Paid S46 delivery charges on merchandise sold to a customer.
12 Purchased file folders, $38.
18 Purchased paper for printer, $62.
27 Paid $28 COD charges on merchandise purchased for resale.
28 Purchased stamps, $52.
30 Reimbursed John Turvey $125 for business car expenses.
31 Cassandra Kirkland sorted the petty cash receipts by accounts affected and exchanged
them for a cheque to reimburse the fund for expenditures. However, there was $105 in
cash in the fund. In addition, the size of the petty cash fund was decreased to $400.
July
Required:
1. Prepare a general journal entry to record establishing the petty cash fund.
2. Prepare a Petty Cash Payments Report similar to Exhibit 7.3 that has these categories: delivery
expense, auto expense, postage expense, merchandise inventory, and office supplies.
3. Prepare the general journal entry to record the reimbursement and the decrease of the fund.
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