Journalizing cash receipts, cash short or over, and posting to the general ledge
ID: 2407335 • Letter: J
Question
Journalizing cash receipts, cash short or over, and posting to the general ledger. Hawaiian Gift Shop, a retail business, started business on April 25, 2019. It keeps a $225 change fund in its cash register. The cash receipts for the period from April 25 to April 30, 2019, are below: INSTRUCTIONS 1. Open the general ledger account for Cash Short or Over, account number 620. 2. Record the cash receipts from April 25 to April 30, 2019, in a general journal. Start the general journal with page 1. 3. Post the amounts for cash short or over in the journal entries to the general ledger. DATE TRANSACTIONS Cash sales per the cash register tape, $1,400 Cash count, $1,624 April 25 26 Cash sales per the cash register tape, $1,050 Cash count, $1,276 Cash sales per the cash register tape, $1,270 Cash count, $1,492 Cash sales per the cash register tape, $1,182 Cash count,$1,411 Cash sales per the cash register tape, $1,092 Cash count,$1,318 27 28 29 30 Cash sales per the cash register tape, $1,217 Cash count, $1,445 Analyze: How will the balance in Cash Short or Over on April 30 be reported in the financial statements?Explanation / Answer
April 25 Receipts $1400
Change to be kept $ 225
Total cash balance $1625
Cash count at the day end $1624
Cash short $1625 - $1624= $1
April 26 Cash receipts $1050
Change to be kept $ 225
Total cash $1275
Cash count at the day end $1276
Cash over $1276 - $1275 = $1
April 27 Cash Receipts $ 1270
Change to be kept $225
Total Cash $1495
Cash count at day end $1492
Cash short $1492 -$1495 = $3
April 28 Cash Receipts $1182
Change to be kept $225
Total cash to be kept $1407
Cash count at the day end $1411
Cash over $1411 - $1407 = $4
April 29 Cash receipts $1092
Total to be kept (including change) $1317
Cash count at the day end $1318
Cash over $1318 - $1317 = $1
April 30 Cash Receipts $1217
Cash to be kept (including Change) $1442
Cash count at the day end $1445
Cash over $1445 - $1442 = $3
Year end cash over = $5
The cash over and short account is an expense account, and so is usually aggregated into the "other expenses" line item in the income statement.
Its balance tends to be minimal.
Here in this case there is cash over of $5 which will be credited to cash over or short account and debited to the change or cash account.
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