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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Problem 4-61 B Recording Petty Cash Transactions

Chicago Inc. had a balance of $1,200 in cash in its petty cash fund at the beginning of September. The following lransaCLions look place in September:

a. On September 4, the custodian paid STS om of petty cash for new stationery on which the company president’s name appeared prominently. This is considered supplies expense.

b. On September 11, the custodian paid 5350 out of petty cash for maintenance manuals for some equipment. This is a maintenance expense.

c. On September 15, the custodian paid $25 out of peuy cash for LransporlaLion-in.

d. On September 23, the custodian paid $50 out of petty cash to have documents delivered to the lawyers who were defending the firm in a lawsuits This is considered an other expense

e. On September 27. the custodian paid $175 out of petty cash to reimburse the president for costs he had incurred when bad weather prevented the company jet from landing 10 pick him up after a meeting. This is a travel expense.

11 On September 30, the custodian submitted receipts For the above expenditures and a check was drawn for the amount to replenish the fund.

Required:

Prepare any journal entries made by the corporation for record these transactions.

To determine

Concept Introduction:

Petty Cash Fund:

Petty cash fund the amount of money provided for day to day small expenses depending upon the level of business. All the expenses are made by paying cash; hence there is an important need to maintain control over petty cash fund.

To Prepare:

The Journal entries to record the transactions of the Petty Cash fund.

Explanation

The Journal entries to record the transactions of the Petty Cash fund are explained as follows:

    Chicago Inc.
    Petty Cash Fund
    Journal Entries
    Date Accounts titles and Explanation Debit Credit
    Sept...

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