Problem 5

Present journal entries to record the following transactions in the books of Marites Corporation, which uses a calendar year as accounting period. Assume that the cccnpany is using the imprest method in accounting for petty cash fund:

1. A petty cash fund was set up on November 1, 2006 in the amount of P2,400.

2. On November 29, 2006, a check was issued to replenish the fund, the composition of which was as follows:

Currency - bills and coins Vouchers showing expenditures for:	166
Office supplies	270
Charges from purchased of supplies	124
Repairs and maintenance	350
Wages paid to casual employees	950

Charges from purchased of goods to be sold 400

3. On December 18, 2006, the fund was replenished and correspondingly increased to

P3,OOO; its composition included the following:
Currency - bills and coins Vouchers showing expenditures for:	158
Store supplies	304
Accounts payable	914
Charges from purchased of goods to be sold	242
Miscellaneous expenses	782

4. An examination on December 31, 2006, disclosed the following composition of the fund, although it was not replenished on this date:

Currency - bills and coins Check of office manager, dated January 5, 2007 Vouchers showing expenditures for:	958
Office supplies	126
Miscellaneous expenses	90
Accounts payable	800

5. On January 5, 2007, the check of office manager was cashed and the proceeds were added to the petty cash fund.

6. On January 6, 2007, replenished disbursement from December 18/ 2006 to January 5, 2007.

Questions

The entry to record the November 29 replenishment of petty cash fund is:

a.	Operating expenses	1,694
	Freight-in	400
	Cash short/over	140
	Cash		2,234
b.	Operating expenses	2,234
	Petty cash fund		2,234
c.	Operating expenses	1,694
	Freight-in	400
	Cash short/(over)	140
	Petty cash fund		2,234

d. No entry snce the company is using an impress fund system.

2. The adjusted Petty Cash Fund balance of MARITES CORPORATION at December 31, 2006 is:

a. P 3,000 b. P 1,958 c, P 984 d. P 958

3. The entry to record the December 31, 2006 adjustment of petty cash fund is:

a.	Operating expenses	216
	Accounts payable	800
	Cash short/over	26
	Petty cash fund		1,042
b.	Operating expenses	216
	Accounts payable	800
	Cash short/over	26
	Cash		1,042
c.	Operating expenses	216
	Accounts payable	800
	Advances - employees	1,000
	Cash short/(over)	26
	Petty cash fund		2,042

500. No entry since there is no replenishment yet.

4. The entry to record the January 6, 2004 replenishment of petty cash fund is:

a.	Operating expenses	216
	Accounts payable	800
	Cash short/over	26
	Petty cash fund		1,042
b.	Operating expenses	216
	Accounts payable	800
	Cash short/over	26
	Cash		1,042
c.	Operating expenses	216
	Accounts payable	800
	Advances - employees	1,000
	Cash short/(over)	26
	Cash		2,042