Assistance please

Principles of Financial Accounting

ACC 120-20

CHAPTER 8 Practical Test

NAME________________________

Problem One

On November 1, Winston T. Kat Company established a $500 petty cash fund. At the end of November, the petty cash fund contained the following cash and petty cash tickets:

1.	Cash of		$19.00
2.	Petty Cash tickets for:
	a. Paid for transportation on inventory purchased from Blue-Eyed Dogz Co	$49.00
	b. Toner Cartridge for office printer	29.25
	c Office Supplies	119.90
	d. Airline Ticket for president trip	176.36
	e. Lunch for vendor and purchasing manager	60.00
	f. Postage for package delivered across town.	15.00

Required: You will need to determine the names of the accounts that you will use.

1. Prepare the journal entry to establish the petty cash fund.

2. Determine which account you would use for the expense amounts and prepare the entry to replenish the petty cash fund on November 30.

3. Assume Kat decides to increase the petty cash fund to $690. Make the journal entry to accomplish this.

Journal
DATE	Description	DEBIT	CREDIT

Problem Two

Use the following information for Woods Paper Products.

· Deposit of $5,794.62 has not been recorded by the bank

· Outstanding checks: #4534, $600.00; #4545, $533.25; and #4550, $400.00; for a total of $1,533.25

· Company Cash balance is $5,695.62

· Bookkeeper recorded a $1,524.00 check as $15,240.00 in payment of the current month's rent

· Bank balance at November 30, 2014 was $16,500.25

· Deposit of $300 was credited by the bank for $3,000.00

· Customer's check, N.O. Money, for $1,280.00 was returned for insufficient funds

· Bank service charge is $70.00

Required:

1. Prepare the bank reconciliation for Woods Paper Products as of November 30, 2014.

2. Prepare the necessary journal entries.

Bank Reconciliation
Journal
DATE	EXPLANATION	PR	DEBIT	CREDIT

PROBLEM THREE

Discuss the specific characteristics of an effective system of internal control for purchases and payment.

Problem Four

The following information is given for Winston & Callie’s Company for November. Be sure to read the additional information on the next page so complete the bank reconciliation.

Cash Balance Per Winston & Callie Company check book, Nov. 30, $13,470.

Cash Deposits			Checks Written
Date	Cash Debit		Date	Check No.	Cash Credit
Nov 1	1,216		Nov 2	2076	1,522
8	10,293		3	2077	72
15	10,780		6	2078	15
22	5,480		7	2079	16,000
28	8,100		8	2080	2,290
Total	35,869		12	2081	8150
			16	2082	10
			17	2083	200
			18	2084	5,001
				Total	33,260

FIRST NATIONAL BANK

Statement for Winston & Callie’s Company

BANK STATEMENT for Nov 2014

Checks/Debits	Deposits/Credits
Posting Date	Check No.	Amount	Posting Date	Amount
11/02	2076	1,522.00	11/03	1,621.00
11/02	2077	72.00	11/09	10,293.00
11/03	2079	16,000.00	11/12	954.00 BC
11/05	2080	2,290.00	11/16	10,780.00
11/10	2081	8150.00	11/23	5,480.00
11/10	2082	10.00	11/30	101.00 INT
11/10		30.00 NSF
11/11	2084	5,001.00
11/17		15.00 SC
11/27		95.00 EFT
			Balance as of 11-30-2012 $6,905.00
Codes:	NSF-Non-Sufficient Funds Check SC- Service Charge EFT Electronic Funds Transfer	INT-Interest earned on checking BC-Bank Collection

Additional Information:

1. NSF check was written by N.O. Moneybags.

2. The $954 bank collection (BC) represents a note receivable, collected by the bank.

3. The Nov. 3 deposit, recorded as $1,216 for cash sales by Winston’s and Callie’s Co., was recorded correctly by the bank as $1,621.

4. EFT Payment was for an Insurance payment

Required: Prepare the Bank Reconciliation for November. You do not have to prepare the journal entries.

Bank Reconciliation