010,000. T\'his property insurai related move, she cuts deductible lise the on t
ID: 2580887 • Letter: 0
Question
010,000. T'his property insurai related move, she cuts deductible lise the on the plant's the property insurance premium in half. In a ides that bonding the plant's employees is a waste of money since the company move y losses due to employee theft. Carla saves the entire amount of the bonding du not experienced any ium by dropping the bonding insurance. t up a petty cash fund for payments of small amounts. The following transactions involving Problem Co curred in May (the last month of the company's fiscal year) company check for $300 to establish the petty cash fund. he petty cash fund Establishing, reimbursing, and adjusting petty cash P2 pared a May1 Prepared a pared . Paid $88 for janitorial expenses. a company check to replenish the fund for the following expenditures made since May 1 Paid $53.68 for miscellaneous expenses c. Paid postage expenses of $53.50 d Paid $47.15 to The County Gazette (the local newspaper) for advertising expense . Counted $62.15 remaining in the petty cashbox. 6 Prepared a company check for $200 to increase the fund to $500. lThe petty cashier reports that $288.20 cash remains in the fund. A company check is drawn to replenish the fund for the following expenditures made since May 15 f Paid postage expenses of $147.36 g. Reimbursed the office manager for mileage expense, $23.50. h. Paid $34.75 in delivery expense for products to a customer, terms FOB destination. The company decides that the May 16 increase in the fund was too large. It reduces the fund by $100, leaving a total of $400. 31 Required and on May 31, and to reflect any increase or decrease in the fund balance on May 16 and May 31 Analysis Component 15, $237.85; May 16, $200.00 .Prepare journal entries (in dollars and cents) to establish the fund on May 1, to replenish it on May 15 Check (1) Ct to Cash Ma 2 Explain how the company's financial statements are affected if the petty cash fund is not replenished company's and no entry is made on May 31Explanation / Answer
2)The company Net Income will be overstated by $ 205.61 as expense are not recorded.
S no. Account Debit credit may 1 Petty cash 300 cash 300 MAY 15 Janitorial expense 88 Miscellaneous expense 53.68 postage expense 53.5 Advertising expense 47.15 cash over /short[242.33-237.85] 4.48 cash [300-62.15] 237.85 may 16 petty cash 200 cash 200 [petty cash fund increased] may31 postage expense 147.36 mileage expense 23.5 Frieght out 34.75 cash over/short[211.8-205.61] 6.19 cash [500-288.20] 211.8 [petty cash fund replenished] may31 cash 100 petty cash 100 [being petty cash fund reduced]Related Questions
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