The petty cash fund was established on May 10, 2014 in the amount of $250

| March 29, 2017

Question
Petty Cash:

1. The petty cash fund was established on May 10, 2014 in the amount of $250

2. Expenditures from the fund by the custodian as of May 31, 2014 were evidenced by approved receipts for the following.

Postage expense……………………………………………………………………..$33.00

Mailing Labels and other supplies………………………………………………65.00

I.O.U from employees…………………………………………………………………30.00

Shipping charges ( to customers)………………………………………………..57.45

Newspaper Advertising………………………………………………………………22.80

Miscellaneous expense………………………………………………………………..15.35

On May 31, 2014, the petty cash fund was replenished and increased to $300; currency and coin in the fund at that time totaled $26.40

National Bank (Bank Statement:

Balance , May 1, 2014 : $8,769 (balance)

Deposits: $28,000 (receipts)

Note payment direct from customer (interest of $30): $930 (receipts)

Checks cleared during May: $31,150 (disbursement)

Bank service charge : $27 (disbursement)

Balance, May 31, 2014: $6,522 (balance)

Nottleman’s Cash Account:

Balance, May , 2014……………………………………………….$8,850

Deposits during May 2014……………………………………….31,000

Checks written during May 2014……………………………..(31,835)

Deposits in transit are determined to be $3,000, and checks outstanding at May 31 total $850. Cash on hand (besides petty cash) at may 31, 2014, is $246.

a) Prepare the journal entries to record the transactions related to the petty cash fund for May.

b) Prepare a bank reconciliation dated May 31, 2014 proceeding to a correct cash balance, and prepare the journal entries necessary to make the books correct and complete.

c) What amount of cash should be reported in May 31, 2014, in the balance sheet?

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