Required information (The following information applies to the questions displayed below.) Rick Hall owns a card shop: Hall's Cards. The following cash information is available for the month of August Year 1. As of August 31, the bank statement shows a balance of $13,010. The August 31 unadjusted balance in the Cash account of Hall's Cards is $8,654. A review of the bank statement revealed the following information: 1. A deposit of $1,260 on August 31, Year 1, does not appear on the August bank statement. 2. It was discovered that a check to pay for baseball cards was correctly written and paid by the bank for $3,605 but was recorded on the books as $4,505. 3. When checks written during the month were compared with those paid by the bank, three checks amounting to $4,785 were found to be outstanding. 4. A debit memo for $69 was included in the bank statement for the purchase of a new supply of checks. Required a. Prepare a bank reconciliation at the end of August showing the true cash balance. HALL'S CARDS Bank Reconciliation August 31, Year 1 Unadjusted Bank Balance, August 31, Year 1 $ 0 True Cash Balance, August 31, Year 1 Unadjusted Book Balance, August 31, Year 1 True Cash Balance, August 31, Year 1 $ Required information (The following information applies to the questions displayed below.) Rick Hall owns a card shop: Hall's Cards. The following cash information is available for the month of August Year 1. As of August 31, the bank statement shows a balance of $13,010. The August 31 unadjusted balance in the Cash account of Hall's Cards is $8,654. A review of the bank statement revealed the following information: 1. A deposit of $1,260 on August 31, Year 1, does not appear on the August bank statement. 2. It was discovered that a check to pay for baseball cards was correctly written and paid by the bank for $3,605 but was recorded on the books as $4,505. 3. When checks written during the month were compared with those paid by the bank, three checks amounting to $4,785 were found to be outstanding. 4. A debit memo for $69 was included in the bank statement for the purchase of a new supply of checks. b. Prepare any necessary journal entries to adjust the books to the true cash balance. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the entry to correct the error created while recording check for inventory. Note: Enter debits before credits. Event General Journal Debit Credit 1 Record entry Clear entry View general Journal Required information (The following information applies to the questions displayed below.) Austin Company established a petty cash fund by issuing check for $333 and appointing Steve Mack as petty cash custodian. Mack had vouchers for the following petty cash payments during the month. Stamps Miscellaneous items Employee supper money Taxi fare Window-washing service $57 31 73 53 88 There was $28 of currency in the petty cash box at the time it was replenished. The four distinct accounting events affecting the petty cash fund for the period were (1) establishment of the fund, (2) reimbursements made to employees, (3) recognition of expenses, and (4) replenishment of the fund. Assume the company uses a traditional approach to petty cash expense recognition and replenishment. Required a. Prepare all general journal entries necessary to (1) establish the fund, (2) reimburse employees, (3) recognize the expenses and replenish the fund. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet Record the entry to establish the fund. Note: Enter debits before credits. Event General Journal Debit Credit 1 Record entry Clear entry View general Journal Required information (The following information applies to the questions displayed below.) Austin Company established a petty cash fund by issuing check for $333 and appointing Steve Mack as petty cash custodian. Mack had vouchers for the following petty cash payments during the month. Stamps Miscellaneous items Employee supper money Taxi fare Window-washing service $57 31 73 53 88 There was $28 of currency in the petty cash box at the time it was replenished. The four distinct accounting events affecting the petty cash fund for the period were (1) establishment of the fund, (2) reimbursements made to employees, (3) recognition of expenses, and (4) replenishment of the fund. Assume the company uses a traditional approach to petty cash expense recognition and replenishment. c. Identify the event depicted in each journal entry recorded in Requirement (a) as asset source, asset use, asset exchange, or claims exchange. If no journal entry was recorded, choose no effect. Event Number Type of Event 1. 2 3. Required information (The following information applies to the questions displayed below.) Austin Company established a petty cash fund by issuing check for $333 and appointing Steve Mack as petty cash custodian. Mack had vouchers for the following petty cash payments during the month. Stamps Miscellaneous items Employee supper money Taxi fare Window-washing service $57 31 73 53 88 There was $28 of currency in the petty cash box at the time it was replenished. The four distinct accounting events affecting the petty cash fund for the period were (1) establishment of the fund, (2) reimbursements made to employees, (3) recognition of expenses, and (4) replenishment of the fund. Assume the company uses a traditional approach to petty cash expense recognition and replenishment. d. Show the effects of the events in Requirement (a) on the financial statements using a horizontal statements model. (In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (1A), or financing activity (FA). Leave blank to indicate that an account was not affected by the event. Enter any decreases to account balances and cash outflows with a minus sign.) Effect of Events on the Financial Statements Horizontal Statements Model Balance Sheet Income Statement Assets Stockholders' Liabilities Revenue Retained Expenses = Net Income + Petty Cash Earnings Event Equity Statement of Cash Flows Cash 1 2 3