On January 1, Craig Company established a petty cash fund of $800. The following summary information was taken from petty cash vouchers for January: 520.40 275.60 Postage Expense $110.00 Office Supplies 158.60 Entertainment Expense 186.84 Miscellaneous Expense 64.96 Required: Show the journal entries to (a) Record the establishment of the petty cash fund (b) Replenish the fund if the balance on January 31 was $275.60. (c) Decrease the fund by $100 on February 1 796.00 Petty cash 800 4 - shortage Exercise 2-Bank Reconciliation Information for Jones Company is shown below: 1. The December 31 bank statement indicated a balance of $28,830, Balance Bank 2. The general ledger cash account on that date shows a balance of $22,290 Balance ec 3. The bank statement showed 590 interest earned during December. 4. The bank returned a customer's NSF check for $675 received as payment on account receivable. 5. Outstanding checks totaled $7,251 6. A $1,458 deposit by Marion Company was erroneously credited to our account by the bank. 7. A $1500 check mailed to the bank for deposit had not reached the bank at the statement date. 8. Check No. 350 for supplies expense cleared the bank for $804 but was erroneously recorded in our books as $720. check No 350 = 804-720-84 Required: a) Prepare a December 31 bank reconciliation statement for Jones Company. b) Show the adjusting entries for the Jones Company December 31 Bank Reconciliation c) Show the cash account after the adjusting entries are posted on December 31. co General Journal Date Post Ref. Debit Credit n 1 800 Petty cash cash Establish Petty cash fund 800 Replenish the fund if the balance on January 31 was $275.60. General Journal Date Post Ref. Debit Credit Jan 31 Postage Expense Office Supplies Entertainment Expense misc. Exponse cash short or over cash Replenish the Petty cash fund 10 158.60 186. 84 64.96 4 524.90 (c) Decrease the fund by $100 on February 1 General Journal Date Post Ref. Debit Credit 1-Feb cash. 100 Petty cash 100 Decrease the Petty cash fund Exercise 2 Solution a) Prepare a December 31 bank reconciliation statement for the Company. Marion Company Bank Reconciliation Statement December 31, 202_ Bank Balance, December 31 Add : Deposit in transit Deduct: Bainkin Error hones outstanding cheques Adjusted Balance, December 31 Book Balance, December 31 Add: Interest Deduct: Recording Error NOF check 28,830 1,500 1458 7,251 8709) 21,621 22,290 90 84+ 675 (759) |21,621 b) Show the adjusting entries for the Marion Company December 31 Bank Reconciliation Date Debit Credit 90.00 90.00 31-Dec cash Interest Revenue To record Interest earned 31-Dec Accounts Receivable cash To record N.SE cheque Returned 31-Dec Accounts Payable I cash To record Error on Errer check. N. 350 675.00 675.00 84.00 84.00 c) Show the cash account after the adjusting entries are posted on December 31. Account: Cash Date Item General Ledger Account No.: 101 PR Debit Credit Balance 121,621 Dec 31
