Problem 7-12 (Part Level Submission) Bill Jovi is reviewing the cash accounting
ID: 2514620 • Letter: P
Question
Problem 7-12 (Part Level Submission)
Bill Jovi is reviewing the cash accounting for Stellar, Inc., a local mailing service. Jovi’s review will focus on the petty cash account and the bank reconciliation for the month ended May 31, 2017. He has collected the following information from Stellar’s bookkeeper for this task.
Petty Cash
1. The petty cash fund was established on May 10, 2017, in the amount of $290.00.
2. Expenditures from the fund by the custodian as of May 31, 2017, were evidenced by approved receipts for the following:
On May 31, 2017, the petty cash fund was replenished and increased to $348.00; currency and coin in the fund at that time totaled $30.62.
Bank Reconciliation
THIRD NATIONAL BANK
BANK STATEMENT
Disbursements
Receipts
Balance
Postage expense $38.28 Mailing labels and other supplies 75.40 I.O.U. from employees 34.80 Shipping charges (to customer) 66.64 Newspaper advertising 26.45 Miscellaneous expense 17.81 Prepare the journal entries to record the transactions related to the petty cash fund for May. (Enter answers to 2 decimal places, e.g. 125.62. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. (To establish petty cash fund) 2. (To record expenditures from the fund) 3. (To replenish petty cash fund) Click if you would like to Show Work for this question: Open Show WorkExplanation / Answer
Answer:
As per the only information given in the question for to Prepare the journal entries to record the transactions related to the petty cash fund for May-
the journal entries to record the transactions related to the petty cash fund for May is as under-
No
Description
Debit $
Credit $
1
Petty Cash
290
Cash
290
2
Postage Expense
38.28
Supplies
75.4
Accounts Receivable (Employees)
34.8
Freight Out
66.64
Advertising Expense
26.45
Misc. Expense
17.81
Cash ($290.00 – $30.62)
259.38
3
Petty Cash
58
Cash
58
No
Description
Debit $
Credit $
1
Petty Cash
290
Cash
290
2
Postage Expense
38.28
Supplies
75.4
Accounts Receivable (Employees)
34.8
Freight Out
66.64
Advertising Expense
26.45
Misc. Expense
17.81
Cash ($290.00 – $30.62)
259.38
3
Petty Cash
58
Cash
58