Waupaca Company establishes a $330 petty cash fund on September 9. On September 30, the fund shows $53 in cash along with receipts for the following expenditures: transportation-in, $51; postage expenses, $71; and miscellaneous expenses, $151. The petty cashier could not account for a $4 shortage in the fund. The company uses the perpetual system in accounting for merchandise inventory. Prepare (1) the September 9 entry to establish the fund, (2) the September 30 entry to reimburse the fund, and (3) an October 1 entry to increase the fund to $400.
Waupaca Company establishes a $330 petty cash fund on September 9. On September 30, the fund shows $53 in cash along with receipts for the following expenditures: transportation-in, $51; postage expenses, $71; and miscellaneous expenses, $151. The petty cashier could not account for a $4 shortage in the fund. The company uses the perpetual system in accounting for merchandise inventory. Prepare (1) the September 9 entry to establish the fund, (2) the September 30 entry to reimburse the fund, and (3) an October 1 entry to increase the fund to $400.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:**Petty Cash Fund Management for Waupaca Company**
**Scenario:**
Waupaca Company sets up a petty cash fund with an initial amount of $330 on September 9. By September 30, the balance is $53 in cash. Receipts total the following expenses:
- Transportation-in: $51
- Postage expenses: $71
- Miscellaneous expenses: $151
The petty cashier reports a $4 shortage that cannot be traced. The company adheres to the perpetual inventory system for managing merchandise accounts.
**Task:**
You are required to prepare journal entries for:
1. Establishing the petty cash fund on September 9.
2. Reimbursing the fund on September 30.
3. Increasing the fund to $400 on October 1.
**Action Steps:**
A "View transaction list" button is included for additional details.
**Journal Entry Worksheet:**
A section is provided where sequential entries can be made, presumably for documenting the financial transactions as required. It appears that there are at least three steps (or entries) listed in a succession (1, 2, 3) in the journal entry worksheet.
Ensure accurate bookkeeping and accounting practices by carefully recording each transaction and preparing the necessary journal entries.
![**Annual Account Balances from Armour Sports at December 31:**
- **Year 2:**
- Accounts Receivable: $59,568
- Net Sales: $1,167,533
- **Year 1:**
- Accounts Receivable: $57,325
- Net Sales: $1,090,531
**Instructions:**
Complete the table to calculate the number of days’ sales uncollected for the years Year 1 and Year 2.
**Note:** Do not round intermediate calculations. Round your "Days' Sales Uncollected" to one decimal place.
**Table for Days' Sales Uncollected:**
| Choose Numerator | / | Choose Denominator | x | Days | = | Days' Sales Uncollected |
|------------------|---|--------------------|---|------|---|-------------------------|
| Year 2 | / | | x | | = | |
| Year 1 | / | | x | | = | |
- Options for Numerator and Denominator:
- Accounts receivable
- Cost of goods sold
- Current assets
- Current liabilities
- Net sales
Use the formula:
\[ \text{Days' Sales Uncollected} = \left( \frac{\text{Accounts Receivable}}{\text{Net Sales}} \right) \times \text{Days} \]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fde73d8a3-703f-492e-8945-c6a65b8a92bf%2F23535140-7c12-43c7-a1ee-7a03dbdeab8e%2Frpidezc_processed.png&w=3840&q=75)
Transcribed Image Text:**Annual Account Balances from Armour Sports at December 31:**
- **Year 2:**
- Accounts Receivable: $59,568
- Net Sales: $1,167,533
- **Year 1:**
- Accounts Receivable: $57,325
- Net Sales: $1,090,531
**Instructions:**
Complete the table to calculate the number of days’ sales uncollected for the years Year 1 and Year 2.
**Note:** Do not round intermediate calculations. Round your "Days' Sales Uncollected" to one decimal place.
**Table for Days' Sales Uncollected:**
| Choose Numerator | / | Choose Denominator | x | Days | = | Days' Sales Uncollected |
|------------------|---|--------------------|---|------|---|-------------------------|
| Year 2 | / | | x | | = | |
| Year 1 | / | | x | | = | |
- Options for Numerator and Denominator:
- Accounts receivable
- Cost of goods sold
- Current assets
- Current liabilities
- Net sales
Use the formula:
\[ \text{Days' Sales Uncollected} = \left( \frac{\text{Accounts Receivable}}{\text{Net Sales}} \right) \times \text{Days} \]
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