All one question. Thank you for your help. **Mastery Problem: Internal Control and Cash****Murdstone, Inc.**You've just been hired as an accountant at Murdstone, Inc., a retailer of supplies for arts and crafts. Since the previous accountant left his position suddenly, the controller of Murdstone, Inc. has asked for your assistance in filing in some missing data for the company’s January accounting records. You’ll also be responsible for training the company’s new accounting intern.**Cash Short and Over**The controller has completed the T accounts for the cash and sales accounts as of January 30, but needs to attend an important conference in another city. She has requested that you prepare the T account for the cash short and over account as of January 30 also. You are told that the balance of the account is zero as of the beginning of January, and that all the company’s sales are in cash. To simplify, this problem assumes:1. Sales account:- Balance 1/1: $0- 1/1: $2,855- 1/12: $6,215- 1/23: $3,320- 1/30: $4,445- Ending Balance: $16,8351. Cash account:- Balance 1/1: $0- 1/1: $2,855- 1/12: $6,225- 1/23: $3,330- 1/30: $4,425- Ending Balance: $16,835Review the preceding T accounts, and then complete the cash short and over T account and associated question that follows it.**T-Account Diagram: Cash Short and Over**The T-account diagram is blank, prompting users to calculate and input the appropriate figures.**Prompt for Calculation:**What will happen to the ending balance in the cash short and over account at the end of the accounting period?---**Petty Cash**Murdstone, Inc. issued a check on January 2 to establish a petty cash fund of $500. On January 31, the amount of cash in the petty cash fund is $440. The company would like to issue a check to replenish the fund, based on the following summary of petty cash receipts:- Office Supplies: $30- Miscellaneous Administrative Expense: $23The company's policy is to record any missing funds in the cash ## Bank Reconciliation**Murstone, Inc. Bank Reconciliation January 31, 20Y5**### Cash Balance according to Bank Statement- **Amount:** $21,357.98#### Adjustments:- **Add:** Deposit in transit on January 31 - $12,135.25- **Deduct:** Outstanding Checks - Check No. 124 - ($642.00) - Check No. 125 - ($75.00) - Check No. 129 - ($1,250.00)#### Total Deductions:- **Total Deductions:** ($1,396.00)### Adjusted Balance- **Adjusted Balance:** $32,097.23### Cash Balance according to Murstone, Inc.- **Amount:** $51,548.58#### Adjustments:- **Add:** Note and Interest Collected by Bank - $15,250.75- **Deduct:** Check Returned because of Insufficient Funds - ($123.47) - **Bank Service Charge:** ($25.00) - **Error in Recording Check No. 129:** - $12,450.00 entered as $1,250.00 - (12,000.00)#### Total Deductions:- **Total Deductions:** (12,273.47)### Adjusted Balance- **Adjusted Balance:** $54,525.86---#### Error Correction AssistanceYou assist the intern to check source documents and find that most of the dollar amounts are correct; however, two dollar amounts are incorrect. After reviewing the following table, identify corrections:| Item | Correct in Intern’s Reconciliation? | If “No,” Corrected Amount ||-------------------------------------------|------------------------------------|---------------------------|| Cash balance according to bank statement | Yes | || Deposit in transit on January 31 | Yes | || Outstanding Check No. 124 | Yes | || Outstanding Check No. 125 | No | $75.00 || Outstanding Check No. 129 | Yes | || Cash balance according to Murstone, Inc. | Yes | || Check returned because of insufficient funds | Yes | || Note and interest collected by bank | Yes | || Bank service charge | No | $

Amount spent from petty cash fund: $500 - $400 $60Journal Entry Date Particulars Debit Credit 31-Jan Office Supplies 30 Miscellaneous Administrative Expense 23 Cash short and over 7 Cash 60Murdstone Inc Bank Reconciliation January 31 20Y5 $ $ Cash Balance as per Bank statement 23,557.98 Adjustments: Deposits in transit on Jan 31 12,125.25 Outstanding Check no 124 (62.00) Outstanding Check no 125 (75.00) Outstanding Check no 129 (1,250.00) Total Adjustments 10,738.25 Adjusted Balance 34,296.23 Cash Balance as Per Murdstone Inc 51,545.88 Adjustments Note and Interest collected by Bank 15,250.75 Check returned because of insufficient funds (23,475.00) Bank Service Charge (25.00) Error in recording Check no 123 (9,000.00) Total Adjustments (17,249.25) Adjusted Balance 34,296.63 Corrected Adjusted Balance : $34,296.63

Business

Accounting

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