Waupaca Company establishes a $310 petty cash fund on September 9. On September 30, the fund shows $43 in cash along with
receipts for the following expenditures: transportation-in, $51; postage expenses, $76; and miscellaneous expenses, $136. The petty
cashier could not account for a $4 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 $385
Date General Journal Debit Credit
Sept 9 Petty cash 310
Cash 310
Sept 30 Merchandise inventory 51
Postage expense 76
Miscellaneous expenses 136
Cash short and over 4
Cash 267
Oct 01 Petty cash 75
Cash 75
Explanation: Merchandise Inventory: Transportation-in costs are included in Merchandise Inventory under a perpetual system.
Palmona Co. establishes a $260 petty cash fund on January 1. On January 8, the fund shows $167 in cash along with receipts for the
following expenditures: postage, $40; transportation-in, $11; delivery expenses, $13; and miscellaneous expenses, $29. Palmona uses
the perpetual system in accounting for merchandise inventory. Prepare journal entry to establish the fund on January 1, reimburse it on
January 8, and reimburse the fund and increase it to $310 on January 8, assuming no entry in part 2. (Hint: Make two separate entries for part 3.)
Date General Journal Debit Credit
Jan.1 Petty cash 260
Cash 260
Jan 08 Postage expense 40
Merchandise inventory 11
Delivery expense 13
Miscellaneous expenses 29
Cash 93
Jan 08 Petty cash 50
Cash 50
Explanation: Merchandise Inventory: Transportation-in costs are included in Merchandise Inventory under a perpetual system.
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, 2015, its Cash account shows a(n) $14,785 debit balance. Del Gato Clinic’s June 30 bank statement shows $13,863 on deposit in the bank.
a. Outstanding checks as of June 30 total $1,903.
b. The June 30 bank statement included a $50 debit memorandum for bank services.
c. Check No. 919, listed with the canceled checks, was correctly drawn for $289 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 $298.
d. The June 30 cash receipts of $2,784 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:
DEL GATO CLINIC
Bank Reconciliation
June 30, 2015
Debit Credit Debit Credit
Bank statement balance $13,863 Book balance $14,785
Add: Add:
Deposit of June 30 $2,784 Error on Ck. No. 919 $9
2,784 9
16,647 14,794
Deduct: Deduct:
Outstanding checks 1,903 Bank service charge 50
1,903 50
Adjusted bank balance $14,744 Adjusted book balance $14,744
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, 2015, its Cash account shows a $27,900 debit balance. The company’s May 31 bank statement shows $26,200
on deposit in the bank.
a. The May 31 bank statement included a $120 debit memorandum for bank services; the company has not yet recorded the cost
of these services.
b. Outstanding checks as of May 31 total $5,800.
c. May 31 cash receipts of $6,400 were placed in the bank’s night depository after banking hours and were not recorded on the May
31 bank statement.
d. In reviewing the bank statement, a $420 check written by Smith Company was mistakenly drawn against Wright’s account.
e. A debit memorandum for $560 refers to a $560 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.
WRIGHT COMPANY
Bank Reconciliation
May 31, 2015
Debit Credit Debit Credit
Bank statement balance $26,200 Book balance $27,900
Add: Add:
Deposit of May 31 $6,400
Bank error 420
6,820
33,020 27,900
Deduct: Deduct:
Outstanding checks $5,800 Bank service charge $120
NSF check 560
5,800 680
Adjusted bank balance $27,220 Adjusted book balance $27,220
Barga Co. reported net sales for 2014 and 2015 of $666,000 and $748,000, respectively. Its year-end balances of accounts receivable
follow: December 31, 2014, $63,000; and December 31, 2015, $94,000.
(a) Complete the below table to calculate the days' sales uncollected at the end of each year. (Do not round
intermediate calculations and round your "Days' Sales Uncollected" answer to 1 decimal place.)
Days' Sales Uncollected
Choose Numerator: / Choose Denominator: x Days = Days' Sales Uncollected
Accounts receivable /Net sales x 365 = Days' sales uncollected
2014: $63,000 / $666,000 x 365 = +/-0.134.5 days
2015: $94,000 / $748,000 x 365 = 45.9 days
Explanation: Days' sales uncollected on December 31, 2014: Days' sales uncollected on December 31, 2015:
$63,000 / $666,000 × 365 = 34.5 days $94,000 / $748,000 × 365 = 45.9 days
