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May 1 Prepared a company check for $250 to establish the petty cash fund. May 15 Prepared a company check to replenish the fund for the following expenditures made since May1:

May 1 Prepared a company check for $250 to establish the petty cash fund. May 15 Prepared a company check to replenish the fund for the following expenditures made since May1:

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter4: Internal Control And Cash
Section: Chapter Questions
Problem 49E
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BUSINESS STUDIES DEPARTMENT INTERMEDIATE ACCOUNTNG1 (TUTORIAL #1) 1. XYZ Co. set up a petty cash fund for payments of small amounts. The following transactions involving the petty cash fund occurred in May (the last month of the company's fiscal year). May 1 Prepared a company check for $250 to establish the petty cash fund. May 15 Prepared a company check to replenish the fund for the following expenditures made since May1: a. Paid $78 for janitorial services. b. Paid $63.68 for miscellaneous expenses. c. Paid postage expenses of $43.50. d. Paid $57.15 to a local newspaper for an advertisement. e. Counted $11.15 remaining in the petty cash box. May 16 Prepared a company check for $200 to increase the fund to $450. May 31 The petty cashier reports that $293.39 cash remains in the fund. A company check is drawn to replenish the fund for the following expenditures made since May 15: a. Paid postage expenses of $48.36. b. Reimbursed the office manager for business mileage, $38.50. c. Paid $39.75 to deliver merchandise to a customer, terms FOB destination. May 31 The company decides that the May 16 increase in the fund was too large. It reduces the fund by $50, leaving a total of $400. Required A. Prepare journal entries to establish the fund on May 1, to replenish it on May 15 and on May 31, and to reflect any increase or decrease in the fund balance on May 16 and May 31.
Transcribed Image Text:BUSINESS STUDIES DEPARTMENT INTERMEDIATE ACCOUNTNG1 (TUTORIAL #1) 1. XYZ Co. set up a petty cash fund for payments of small amounts. The following transactions involving the petty cash fund occurred in May (the last month of the company's fiscal year). May 1 Prepared a company check for $250 to establish the petty cash fund. May 15 Prepared a company check to replenish the fund for the following expenditures made since May1: a. Paid $78 for janitorial services. b. Paid $63.68 for miscellaneous expenses. c. Paid postage expenses of $43.50. d. Paid $57.15 to a local newspaper for an advertisement. e. Counted $11.15 remaining in the petty cash box. May 16 Prepared a company check for $200 to increase the fund to $450. May 31 The petty cashier reports that $293.39 cash remains in the fund. A company check is drawn to replenish the fund for the following expenditures made since May 15: a. Paid postage expenses of $48.36. b. Reimbursed the office manager for business mileage, $38.50. c. Paid $39.75 to deliver merchandise to a customer, terms FOB destination. May 31 The company decides that the May 16 increase in the fund was too large. It reduces the fund by $50, leaving a total of $400. Required A. Prepare journal entries to establish the fund on May 1, to replenish it on May 15 and on May 31, and to reflect any increase or decrease in the fund balance on May 16 and May 31.
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