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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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BuyFindarrow_forward

Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Miller Enterprises deposits the cash received during each day at the end of the day. Miller deposited $48,287 on October 3 and $50,116 on October 4. Cash register records and other documents E supporting the deposits are summarized as follows:

10.8 10“

Cash sale: $36,690 $49,310 @

Collections on account 10,875 9,813

Total receipts $41565 $541123 mn: HUI

Required:

1. Calculate the amount 0? cash over or cash shun for each day.

2. Prepare the journal entry to record the receipt and deposit of cash on October 3.

3. Prepare the journal entry to record the receipt and deposit of cash on October 4.

4. CONCEPTUAL CONNECTION If you were the manager with responsibility over the cash registers. how would you use this information?

1.

To determine

To compute: The amount of cash over or short for each of the given days.

Introduction:.Cash over or short represents the difference between the cash received and deposited in the bank. Such difference is recorded in the cash over and short account which is a type of income statement account. Cash shortfalls are expenses; whereas, cash over deposited is an income.

Explanation

Statement to show the status of cash deposited in comparison with cash received:

    DateAmount Received($)Amount Deposited($)Cash Over/ShortAmount ($)
    October 3

2.

To determine

To prepare:Journal entry to record cash collection of 3rd October.

Introduction: Journal entries provide a record of the financial activities undertaken within an organization. Journal entries helps in preparation of financial statements of a company.

3.

To determine

To record:Journal entry to record cash collection of 4th October.

4.

To determine

The manner in which the cash over and short information can be used by the manager responsible over the cash registers.

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