Horngren's Financial & Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780133866292
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Question
Chapter 7, Problem 7.23AP
Requirement 1:
To determine
Petty cash fund: Petty cash fund is a fund established to pay insignificant amounts like postage, office supplies, and lunches. In day-to-day life, it becomes difficult to use checks for daily expenses. Therefore, companies maintain some minimum amount of funds in the hand for such daily expenses. These funds are called as petty cash funds. These funds are managed by custodian. This system is otherwise called as imprest system.
Explain the characteristics and features of an imprest system.
Requirement 2:
To determine
Determine the petty cash fund before replenishment.
Requirement 3:
To determine
Prepare the journal entries.
Requirement 4:
To determine
Journalize the increase of balance in the petty cash fund to $500.
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Students have asked these similar questions
Accounting for petty cash transactions
On September 1, Party Salad Dressings creates a petty cash fund with an imprest balance of $600. During September, Michael Martell, the fund custodian, signs the following petty cash tickets:
pretty Cash Ticket No items Amount
101 Office supplies 60$
102 Cab Fare of executive 25
103 Delivery of package accross town 45
104 Business dinner 55
105 Merchandise inventory 75
On September 30, prior to replenishment, the fund contains these tickets plus cash of $355. The accounts affected by petty cash payments are Office Supplies, Travel Expense, Delivery…
On June 1, Meadow Salad Dressings creates a petty cash fund with an imprest balance of $300. During June, Sunny Lewis, the fund custodian, signs the following petty cash tickets:
(Click the icon to view the petty cash tickets.)
On June 30, prior to replenishment, the fund contains these tickets plus cash of $55. The accounts affected by petty cash payments are Office Supplies, Travel Expense, Delivery Expense, Entertainment
Expense, and Merchandise Inventory.
Requirements
1. Explain the characteristics and the internal control features of an imprest fund.
2. On June 30, how much cash should the petty cash fund hold before it is
replenished?
3. Journalize all required entries to create the fund and replenish it. Include
explanations.
-X
4. Make the July 1 entry to increase the fund balance to $400. Include an
explanation, and briefly describe what the custodian does.
Data table
Petty Cash
Ticket Number
Ticket No. 101
Ticket No. 102
Ticket No. 103
Ticket No. 104
Ticket No. 105
Item…
On April 2, Granger Sales decides to establish a $350 petty cash fund to relieve the burden on Accounting.
a. Journalize the establishment of the fund. If an amount box does not require an entry, leave it blank.
April 2
b. On April 10, the petty cash fund has receipts for mail and postage of $65, contributions and donations of $39, and meals and
entertainment of $97. Petty cash on hand is $147. Journalize the replenishment of the fund. Record any missing funds in the cash short and
over account. If an amount box does not require an entry, leave it blank.
April 10
c. On April 11, Granger Sales decides to increase petty cash to $460. Journalize this event. If an amount box does not require an entry,
leave it blank.
April 11
Chapter 7 Solutions
Horngren's Financial & Managerial Accounting (5th Edition)
Ch. 7 - Prob. 1QCCh. 7 - Prob. 2QCCh. 7 - Prob. 3QCCh. 7 - Prob. 4QCCh. 7 - Prob. 5QCCh. 7 - Prob. 6QCCh. 7 - Prob. 7QCCh. 7 - Prob. 8QCCh. 7 - Prob. 9QCCh. 7 - Prob. 10QC
Ch. 7 - Prob. 1RQCh. 7 - Prob. 2RQCh. 7 - What are the five components of internal control?...Ch. 7 - Prob. 4RQCh. 7 - What is separation of duties?Ch. 7 - Prob. 6RQCh. 7 - Prob. 7RQCh. 7 - Prob. 8RQCh. 7 - How do businesses control cash receipts by mail?Ch. 7 - Prob. 10RQCh. 7 - Prob. 11RQCh. 7 - Prob. 12RQCh. 7 - Prob. 13RQCh. 7 - Prob. 14RQCh. 7 - Prob. 15RQCh. 7 - Prob. 16RQCh. 7 - Prob. 17RQCh. 7 - Defining internal control Internal controls are...Ch. 7 - Prob. 7.2SECh. 7 - Prob. 7.3SECh. 7 - Prob. 7.4SECh. 7 - Prob. 7.5SECh. 7 - Prob. 7.6SECh. 7 - Prob. 7.7SECh. 7 - Prob. 7.8SECh. 7 - Prob. 7.9SECh. 7 - Prob. 7.10SECh. 7 - Prob. 7.11ECh. 7 - Prob. 7.12ECh. 7 - Prob. 7.13ECh. 7 - Evaluating internal control over cash payments...Ch. 7 - Understanding internal control, components,...Ch. 7 - Prob. 7.16ECh. 7 - Prob. 7.17ECh. 7 - Prob. 7.18ECh. 7 - Prob. 7.19ECh. 7 - Prob. 7.21APCh. 7 - Prob. 7.22APCh. 7 - Prob. 7.23APCh. 7 - Prob. 7.24APCh. 7 - Prob. 7.25APCh. 7 - Prob. 7.26APCh. 7 - Prob. 7.27BPCh. 7 - Prob. 7.28BPCh. 7 - Prob. 7.29BPCh. 7 - Prob. 7.30BPCh. 7 - Prob. 7.31BPCh. 7 - Prob. 7.32BPCh. 7 - Prob. 7.33CPCh. 7 - Prob. 7.34PSCh. 7 - Prob. 7.2CTDCCh. 7 - Levon Helm was a kind of one-man mortgage broker....Ch. 7 - Prob. 7.1CTCA
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- On July 2 Kellie Company has decided to initiate a petty cash fund in the amount of $1,200. Prepare journal entries for the following transactions: A. On July 5, the petty cash fund needed replenishment, and the following are the receipts: Auto Expense $125, Supplies $368, Postage Expense $325, Repairs and Maintenance Expense $99, Miscellaneous Expense $259. The cash on hand at this time was $38. B. On June 14, the petty cash fund needed replenishment, and the following are the receipts: Auto Expense $425, Supplies $95, Postage Expense $240, Repairs and Maintenance Expense $299, Miscellaneous Expense $77. The cash on hand at this time was $110. C. On June 23, the petty cash fund needed replenishment and the following are the receipts: Auto Expense $251, Supplies $188, Postage Expense $263, Repairs and Maintenance Expense $182, Miscellaneous Expense $203. The cash on hand at this time was $93. D. On June 29, the company determined that the petty cash fund needed to be decreased to $1,000. E. On June 30, the petty cash fund needed replenishment, as it was month end. The following are the receipts: Auto Expense $14, Supplies $75, Postage Expense $150, Repairs and Maintenance Expense $121, Miscellaneous Expense $39. The cash on hand at this time was $603.arrow_forwardOn September 1, French company has decided to initiate a petty cash fund in the amount of $800. Prepare journal entries for the following transactions: A. On September 5, the petty cash fund needed replenishment, and the following are the receipts: Auto Expense $37, Supplies $124, Postage Expense $270, Repairs and Maintenance Expense $168, Miscellaneous Expense $149. The cash on hand at this time was $48. B. On September 14, the petty cash fund needed replenishment and the following are the receipts: Auto Expense $18, Supplies $175, Postage Expense $50, Repairs and Maintenance Expense $269, Miscellaneous Expense $59. The cash on hand at this time was $210. C. On September 23, the petty cash fund needed replenishment and the following are the receipts: Auto Expense $251, Supplies $88, Postage Expense $63, Repairs and Maintenance Expense $182, Miscellaneous Expense $203. The cash on hand at this time was $20. D. On September 29, the company determined that the petty cash fund needed to be increased to $1,000. E. On September 30, the petty cash fund needed replenishment as it was month end. The following are the receipts: Auto Expense $18, Supplies $15, Postage Expense $57, Repairs and Maintenance Expense $49, Miscellaneous Expense $29. The cash on hand at this time was $837.arrow_forwardOn April 2, Granger Sales decides to establish a $280 petty cash fund to relieve the burden on ACcounting. a. Journalize the establishment of the fund. If an amount box does not require an entry, leave it blank. Apr. 2 b. On April 10, the petty cash fund has receipts for mail and postage of $41, contributions and donations of $19, and meals and entertainment of $109, and $107 in cash. Journalize the replenishment of the fund. If an amount box does not require an entry, leave it blank. Apr. 10 c. On April 11, Granger Sales decides to increase petty cash to $380. Journalize this event. If an amount box does not reguire an entry, leave it blank. Apr. 11arrow_forward
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