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Chapter 6: 3PSA_2 (page 310)

Nakashima Gallery had the following petty cash transactions in February of the current year.

Feb. 2 Wrote a \(400 check, cashed it, and gave the proceeds and the petty cashbox to Chloe Addison, the petty cashier.

5 Purchased paper for the copier for \)14.15 that is immediately used.

9 Paid \(32.50 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Nakashima uses the perpetual system to account for merchandise inventory.

12 Paid \)7.95 postage to deliver a contract to a client.

14 Reimbursed Adina Sharon, the manager, \(68 for mileage on her car.

20 Purchased stationery for \)67.77 that is immediately used.

23 Paid a courier \(20 to deliver merchandise sold to a customer, terms FOB destination.

25 Paid \)13.10 COD shipping charges on merchandise purchased for resale, terms FOB shipping point.

27 Paid \(54 for postage expenses.

28 The fund had \)120.42 remaining in the petty cashbox. Sorted the petty cash receipts by accounts affected and exchanged them for a check to reimburse the fund for expenditures.

28 The petty cash fund amount is increased by \(100 to a total of \)500.

Required

2. Prepare a petty cash payment report for February with these categories: delivery expense, mileage expense, postage expense, merchandise inventory (for transportation-in), and office supplies expense. Sort the payments into the appropriate categories and total the expenditures in each category.

Short Answer

Expert verified

Answer

The Petty cash payment reports show the total expenditure as $277.47.

Step by step solution

01

Step-by-Step SolutionStep 1: Introduction to topic

Petty Cash Payments Report: The petty cash report should incorporate the date, the cash transfers into petty cash, details regarding the exchange, the sum circulated, and a running balance. When your balance reaches a point where you need a renewal sum, then you need to prepare a check to take petty cash to get back to the original funded amount.

02

Petty Cash Payments Report

Shelton Gallery

Petty Cash Payments Report

Delivery expense



Feb. 23

Delivery of customer's merchandise


$20

Mileage expense



Feb. 14

Reimbursement for mileage


$68

Postage expense



Feb. 12

Express delivery of contract

$7.95


Feb. 27

Purchased postage stamps

$54

$61.95

Merchandise inventory (transportation-in)*



Feb. 9

COD charges on purchases

$32.50


Feb. 25

COD charges on purchases

$13.10

$45.6

Office supplies expense



Feb. 5

Purchased paper for copier

$14.15


Feb. 20

Purchased stationery

$67.77

$81.92

Total



$277.47

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Most popular questions from this chapter

For each of these five separate cases, identify the principle(s) of internal control that is violated. Recommend what the business should do to ensure adherence to principles of internal control.

1. Latisha Tally is the company’s computer specialist and oversees its computerized payroll system. Her boss recently asked her to put password protection on all office computers. Latisha has put a password in place that allows only the boss access to the file where pay rates are changed and personnel are added or deleted from the payroll.

Shamara Systems most recently reconciled its bank balance on April 30 and reported two checks outstanding at that time, No. 1771 for \(781 and No. 1780 for \)1,425.90. The following information is available for its May 31, 2017, reconciliation

From the May 31 Bank Statement PREVIOUS BALANCE TOTAL CHECKS AND DEBITS TOTAL DEPOSITS AND CREDITS CURRENT BALANCE CHECKS AND DEBITS DEPOSITS AND CREDITS 18,290.70 Date 05/01 1771 05/04 No. Amount Date Amount 13,094.80 16,566.80 21,762.70 05/02 1783 05/14 05/04 1782 05/22 1784 05/18 05/26 05/11 05/25 05/25 1787 05/26 1785 05/29 1788 05/31 2,438.00 2,898.00 1,801.80 2,079.00 7,350.00 CM 781.00 382.50 1,285.50 431.80 NSF 8,032.50 63.90 654.00 14.00 SC

From Shamara Systems’s Accounting Records Cash Receipts Deposited Cash Date Debit May 4 2,438.00 14 2,898.00 22 1,801.80 26 2,079.00 31 2,727.30 11,944.10 Cash Disbursements Check Cash No. Credit 1782 1,285.50 1783 382.50 1784 1,449.60 1785 63.90 1786 353.10 1787 8,032.50 1788 644.00 1789 639.50 12,850.60 Cash Acct. No. 101 Date Explanation PR Debit Credit Balance Apr. 30 Balance 16,083.80 May 31 Total receipts R7 11,944.10 28,027.90 31 Total disbursements D8 12,850.60 15,177.30

Additional Information

Check No. 1788 is correctly drawn for \(654 to pay for May utilities; however, the recordkeeper misread the amount and entered it in the accounting records with a debit to Utilities Expense and a credit to Cash for \)644. The bank paid and deducted the correct amount. The NSF check shown in the statement was originally received from a customer, W. Sox, in payment of her account. The company has not yet recorded its return. The credit memorandum (CM) is from a \(7,400 note that the bank collected for the company. The bank deducted a \)50 collection expense and deposited the remainder in the company’s account. The collection and expense have not yet been recorded.

Required

1. Prepare the May 31, 2017, bank reconciliation for Shamara Systems.

Choose from the following list of terms/phrases to best complete the following statements.

a. Cash c. Outstanding check e. Bank reconciliation

b. Cash equivalents d. Liquidity f. Current assets

1. The _______ category includes currency and coins along with amounts on deposit in bank accounts, checking accounts, and savings accounts.

For each of the following items a through g, indicate whether its amount (1) affects the bank or book side of a bank reconciliation, (2) represents an addition or a subtraction in a bank reconciliation, and (3) requires an adjusting journal entry.

Bank or Book Side Add or Subtract Adj. Entry or Not

g. Outstanding deposits. . . . . . . . . . . . . . .

BTN 6-2 Key comparative figures for Apple and Google follow.

\( millions Current Year Prior Year Current Year Prior Year

Accounts receivable . . . . . . . . . . . . \) 16,849 \( 17,460 \)11,556 $ 9,383

Net sales . . . . . . . . . . . . . . . . . . . . . 233,715 182,795 74,989 66,00

Required

Compute days’ sales uncollected (rounded to two decimals) for these companies for each of the two years shown. Comment on any trends for the companies. Which company has the largest percent change (rounded to two decimals) in days’ sales uncollected?
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