ACC 106 Handout 7: Petty Cash and bank reconciliation Exercise 1: Salle-Peru Co. uses an imprest petty cash system. The fund was established on March 1 with a balance of $150. During March the following petty cash receipts were found in the petty cash box Date Receipt No. For Amount 5/3 Stamp Inventory Freight-out exp. Miscellaneous exp. Travel exp. Miscellaneous exp. The fund was replenished on March 15 when the fund contained $5 cash. Instructions Journalize the entries in March related to petty cash fund. Exercise 2 Assume that in March 15, the petty cash fund in Hassan Co. includes the following $13 $44 Cash Receipts of postage expense Receipt of Freight expense Receipt of Miscellaneous expenses $38 $5 The Journal entry is Cash Shortage Example 1 Assume that in March 15, the petty cash fund in Hassan Co. includes the following Cash $12 Receipts of postage expense $44 Freight expense $38 Miscellaneous expenses $5 The Journal entry is Cash Overage Example 2 Assume that in March 15, the petty cash fund in Hassan Co. includes the following Cash Receipts of postage expense Freight expense Miscellaneous expenses $14 $44 $38 $5 The Journal entry is Exercise 3: The cash book of Jones showed a balance at the bank of $570 in hand on 31 January 1931. At the same date, the bank statement balance of Jones' account was $446 overdrawn. The difference was accounted for as follows: 1) Cheques for $1,555 sent to creditors on 30 January were not paid by the bank until 8 February 2) Cheques amounting to $2,520 paid into the bank on 31 January were not credited by the bank until 1 February 3) A standing order for a charitable subscription of $60 had been paid by the bank on 21 January but no entry had been made in the cash book. 4) A cheque paid by Jones for rent on 15 January for $345 had been entered in his cash book as $354 Prepare the bank reconciliation statement. Per Bank statement Per Book statement balance at the bank book of J. Jones Charges or fees Outstanding Checks Deposit in Transit Error Exercise 4: Milner Boat Company's bank statement for the month of September showed a balance per bank of $7,000. The company's Cash account in the general ledger had a balance of $5,459 at September 30. Other information is as follows: (1) Cash receipts for September 30 recorded on the company's books were $5,200 but this amount does not appear on the bank statement. (2) The bank statement shows a debit memorandum for $40 for check printing charges. (3) The total amount of checks still outstanding at September 30 amounted to $6,000. (4) Check No. 138 was correctly written and paid by the bank for $409. The cash payment journal reflects an entry for Check No. 138 as a debit to Accounts Payable and a credit to Cash in Bank for $490. (5) The bank returned an NSF check from a customer for $560. (6) The bank included a credit memorandum for $1.260 which represents collection of a customer's note by the bank for the company, principal amount of the note was $1,200 and interest was $60. Interest has not been accrued. Instructions: Prepare a bank reconciliation for Milner Boat Company at September Per Bank statement Per Book statement