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.

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Answer 1

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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Coronado Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a commercial fire extinguisher. The home model is a high-volume (54,000 units), half-gallon cylinder that holds 2 1/2 pounds of multi- purpose dry chemical at 480 PSI. The commercial model is a low-volume (10,200 units), two-gallon cylinder that holds 10 pounds of multi-purpose dry chemical at 390 PSI. Both products require 1.5 hours of direct labor for completion. Therefore, total annual direct labor hours are 96,300 or [1.5 hours x (54,000+10,200)]. Estimated annual manufacturing overhead is $1,566,090. Thus, the predetermined overhead rate is $16.26 or ($1,566,090 ÷ 96,300) per direct labor hour. The direct materials cost per unit is $18.50 for the home model and $26.50 for the commercial model. The direct labor cost is $19 per unit for both the home and the commercial models. The company's managers identified six activity cost pools and related…

Coronado Fire, Inc. manufactures steel cylinders and nozzles for two models of fire extinguishers: (1) a home fire extinguisher and (2) a commercial fire extinguisher. The home model is a high-volume (54,000 units), half-gallon cylinder that holds 2 1/2 pounds of multi- purpose dry chemical at 480 PSI. The commercial model is a low-volume (10,200 units), two-gallon cylinder that holds 10 pounds of multi-purpose dry chemical at 390 PSI. Both products require 1.5 hours of direct labor for completion. Therefore, total annual direct labor hours are 96,300 or [1.5 hours x (54,000+ 10,200)]. Estimated annual manufacturing overhead is $1,566,090. Thus, the predetermined overhead rate is $16.26 or ($1,566,090 ÷ 96,300) per direct labor hour. The direct materials cost per unit is $18.50 for the home model and $26.50 for the commercial model. The direct labor cost is $19 per unit for both the home and the commercial models. The company's managers identified six activity cost pools and related…

Answer 2

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.

Expert Solution & Answer

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Answer 3

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.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

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.

Expert Solution & Answer

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Answer 5

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.

Answer 6

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.

Answer 7

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.

Answer 8

Requirement 2:

To determine

Determine the petty cash fund before replenishment.

Answer 9

Requirement 2:

To determine

Determine the petty cash fund before replenishment.

Answer 10

Requirement 3:

To determine

Prepare the journal entries.

Answer 11

Requirement 3:

To determine

Prepare the journal entries.

Answer 12

Requirement 4:

To determine

Journalize the increase of balance in the petty cash fund to $500.

Answer 13

Requirement 4:

To determine

Journalize the increase of balance in the petty cash fund to $500.

Answer 14

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Answer 15

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Answer 16

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Answer 17

Ch. 7 - Prob. 1QC Ch. 7 - Prob. 2QC Ch. 7 - Prob. 3QC Ch. 7 - Prob. 4QC Ch. 7 - Prob. 5QC Ch. 7 - Prob. 6QC Ch. 7 - Prob. 7QC Ch. 7 - Prob. 8QC Ch. 7 - Prob. 9QC Ch. 7 - Prob. 10QC

Solution Summary: The author explains how a petty cash fund is established to pay insignificant amounts like postage, office supplies, and lunches.

Concept explainers

Determine the petty cash fund before replenishment.

Prepare the journal entries.

Journalize the increase of balance in the petty cash fund to $500.

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Chapter 7 Solutions