The custodian was not authorized to handle cash from payroll- or sales-related transactions. Determine the cash shortage/overage in the petty cash fund. Show solutions and explanations

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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LINO INC established a petty cash fund for USD12,000. Before it was replenished, the petty cash box has the following items

 

             Bills and currencies                                                                                       5, 400

             Various employee checks in payment of IOUS                                           2, 350

             An empty pay envelope labeled “salary of Employee Z”                              1, 850

             IOUS from employees                                                                                   2, 100

             Customer checks in payment of accounts with the company                       4, 900

             Unreplenished expense vouchers are:

                            Supplies (USD 360 remains unused as of year-end)                     1, 500

                            Representation                                                                               750

                            Transportation                                                                               1, 000

The custodian was not authorized to handle cash from payroll- or sales-related transactions.

Determine the cash shortage/overage in the petty cash fund. Show solutions and explanations.

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