Collin Audit is reviewing the cash accounting for Baker, Inc., a local hair salon. Collin's review will focus on the petty cash account and the bank reconciliation for the month ended September 30, 2017. Collin has collected the following information from Londons bookkeeper for this task.

Petty Cash

1. The petty cash fund was established on September 2, 2017, in the amount of $300.

2. Expenditures from the fund by the custodian as of September 30 , 2017, were evidenced by approved receipts for the following.

Postage expense $61.50

Mailing labels and other supplies 31.00

I.O.U. from employees 25.00

Shipping charges 79.36

Newspaper advertising 38.00

Miscellaneous expense 12.80

On September 30, 2017, the petty cash fund was replenished and increased to $400; currency and coin in the fund at that time totaled $52.34.

Bank Reconciliation

TEXAS STATE BANK

Bank Statement Disbursements Receipts Balance

Balance, September 1, 2017 $12,637

Deposits $35,000

Note payment direct from customer (interest of $45) 1,585

Checks cleared during May $36,900

Bank service charges 20

Balance, September 30, 2017 12302

Bank service charges 20

Balance, September 30, 2017 12172

Deposits during September 2017 36,200

Checks written during September 2017 (37,450)

Deposits in transit are determined to be $1,560, and checks outstanding at September 30 total $1,800. Cash on hand (besides petty cash) at September 30, 2017, is $425.

Instructions(a) Prepare the journal entries to record the transactions related to the petty cash fund for September.(b) Prepare a bank reconciliation dated September 30, 2017, proceeding to a correct cash balance, and prepare the journal entries necessary to make the books correct and complete.(c) What amount of cash should be reported in the September 30, 2017, balance sheet?