ACCT 211 Week 4 Chapter 6 Exercise

ACCT 211 Week 4 Chapter 6 Exercise | Accounting Assignment Help | Liberty University 

Chapter 6 Exercises

v  Question 1

Waupaca Company establishes a $370 petty cash fund on September 9. On September 30, the fund shows $93 in cash along with receipts for the following expenditures: transportation costs of merchandise purchased, $49; postage expenses, $77; and miscellaneous expenses, $144. The petty cashier could not account for a $7 shortage in the fund. The company uses the perpetual system in accounting for merchandise inventory.
 
Prepare (1) the September 9 entry to establish the fund, (2) the September 30 entry to reimburse the fund, and (3) an October 1 entry to increase the fund to $415.

v  Question 2

Palmona Co. establishes a $140 petty cash fund on January 1. On January 8, the fund shows $49 in cash along with receipts for the following expenditures: postage, $37; transportation-in, $13; delivery expenses, $15; and miscellaneous expenses, $26. Palmona uses the perpetual system in accounting for merchandise inventory.
 
Prepare journal entries to (1) establish the fund on January 1, (2) reimburse it on January 8, and (3) both reimburse the fund and increase it to $190 on January 8, assuming no entry in part 2. (Hint: Make two separate entries for part 3.)

v  Question 3

Del Gato Clinic deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on June 30, 2017, its Cash account shows an $14,676 debit balance. Del Gato Clinic’s June 30 bank statement shows $14,938 on deposit in the bank.

1. Outstanding checks as of June 30 total $2,589.
2. The June 30 bank statement lists a $60 service charge.
3. Check No. 919, listed with the canceled checks, was correctly drawn for $489 in payment of a utility bill on June 15. Del Gato Clinic mistakenly recorded it with a debit to Utilities Expense and a credit to Cash in the amount of $498.
4. The June 30 cash receipts of $2,276 were placed in the bank’s night depository after banking hours and were not recorded on the June 30 bank statement.

Prepare a bank reconciliation for Del Gato Clinic using the above information:

v  Question 4

Wright Company deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on May 31, 2017, its Cash account shows a $30,100 debit balance. The company’s May 31 bank statement shows $28,400 on deposit in the bank.
 

1. The May 31 bank statement lists $230 in bank service charges; the company has not yet recorded the cost of these services.
2. Outstanding checks as of May 31 total $6,900.
3. May 31 cash receipts of $7,500 were placed in the bank’s night depository after banking hours and were not recorded on the May 31 bank statement.
4. In reviewing the bank statement, a $530 check written by Smith Company was mistakenly drawn against Wright’s account.
5. The bank statement shows a $340 NSF check from a customer; the company has not yet recorded this NSF check.

 
Prepare a bank reconciliation for the company using the above information.

v  Question 5

Barga Co. reported net sales for 2016 and 2017 of $667,000 and $747,000, respectively. Its year-end balances of accounts receivable follow: December 31, 2016, $64,000; and December 31, 2017, $92,000.
 
a. Complete the below table to calculate the days' sales uncollected at the end of each year. (Round your "Days' Sales Uncollected" answer to 1 decimal place.)