Journalizing

Mac Mac Duds Co., a distributor of wellness equipment, decided to establish P20,000 as the company's imprest system of petty cash fund. The fund was established for day-to-day small expenses, where issuing checks is impracticable. The date of establishment of fund is September 1, 201A.

Requirement: Identify the proper entry for each of the following transactions. (6 items x 5 points)

1.Record the establishment of Mac Mac Duds' petty cash fund the entry.

From September 1 to September 4, payments were made for the following items:

Meeting Expense

P 2,750

Transportation Expense

3,500

Supplies Expense

4,350

No entry is required to record the above disbursements.

2.On September 15, the petty cash custodian decided to replenish the fund by submitting all expenditures shown above. A check worth P10,600 was issued to replenish the petty cash fund.

Record the entry for replenishment.

On September 30, no replenishment of petty cash was made. An examination of the fund revealed the following items:

Bills and Coins

P7,750

Petty Cash Voucher For

Advances to Employees

4,350

Office Supplies

1,250

Meeting Expenses

2,000

Postage Stamps

1,550

The cash on hand counted and paid vouchers above are worth P16,900, which is less than the amount of the imprest balance. Hence, the difference of P3,100 is a cash shortage.

3.Record the adjusting entry on September 30, 201A to properly account the correct balance of petty cash.

4.What is the adjusted or true balance at the reporting date?

Assume that on September 30, the fund comprises the following items:

Bills and Coins

P11,750

Petty Cash Voucher For

Advances to Employees

4,350

Office Supplies

1,250

Meeting Expenses

2,000

Postage Stamps

1,550

The total of the bills and coins counted and paid petty cash vouchers of P20,900 exceeds the amount of the petty cash fund balance of P10,000. The excess is recorded as cash overage or miscellaneous income.

5.Record the adjusting entry on September 30.

6.Record the entry for the deposit of the cash overage.

Rubric for grading (per item)

PERFORMANCE INDICATORS POINTS

Correct accounts and amounts used

3

Computed final amounts are correct/balanced

2

TOTAL

5