Fern's Flowers established a $400 petty cash fund. The following expenditures were made from the fund:Office supplies$129.00Shipping expense86.50Maintenance expense48.68Miscellaneous expenses44.35A count of the cash in the fund revealed a balance of $89.00.Required:a) Enter the event relating to establishing the fund into the horizontal financial statements model. Indicate dollar amounts of increases and decreases; for accounts that are not affected, indicate NA. For cash flows, show whether they are operating activities (OA), investing activities (IA), or financing activities (FA).b) Assets=Liab.+Stk. EquityRev.?Exp.=Net IncomeStmt. of Cash FlowsCash+Petty Cash???????????????????????b) What is the amount of the check that must be written
to replenish the fund?c) Assuming the company combines the entries to record the disbursements and to replenish the petty cash fund, prepare the general journal entry.
What will be an ideal response?
a)
| Assets | = | Liab. | + | Stk. Equity | Rev. | ? | Exp. | = | Net Income | Stmt. of Cash Flows | ||
| Cash | + | Petty Cash | ? | ? | ? | ? | ? | ? | ? | ? | ? | ? |
| (400.00) | ? | 400.00 | ? | NA | ? | NA | NA | ? | NA | ? | NA | NA |
c)
| (1) | Office supplies | 129.00 | ? |
| ? | Shipping expense | 86.50 | ? |
| ? | Maintenance expense | 48.68 | ? |
| (2) | Miscellaneous expenses | 44.35 | ? |
| ? | Cash short and over | 2.47 | ? |
| ? | Cash | ? | 311.00 |
c) Since the amount of petty cash on hand is $89, it will take $311 to replenish the petty cash fund to its imprest balance of $400. Because the payments from the fund totaled $308.53 (or $129.00 + $86.50 + $48.68 + $44.25), there is a cash shortage of $2.47.
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