P8-4A The bank portion of the bank reconciliation for Backhaus Company at November 30, 2008, was as follows. BACKHAUS COMPANY Bank Reconciliation November 30, 2008 Cash balance per bank $14,367.90 Add: Deposits in transit 2,530.20 16,898.10 Less: Outstanding checks Check Number Check Amount 3451 $2,260.40 3470 720.10 3471 844.50 3472 1,426.80 3474 1,050.00 6,301.80 Adjusted cash balance per bank $10,596.30 The adjusted cash balance per bank agreed with the cash balance per books at November 30. The December bank statement showed the following checks and deposits. Bank Statement Checks Deposits Date Number Amount Date Amount 12-1 3451 $2,260.40 12-1 $2,530.20 12-2 3471 844.50 12-4 1,211.60 12-7 3472 1,426.80 12-8 2,365.10 12-4 3475 1,640.70 12-16 2,672.70 12-8 3476 1,300.00 12-21 2,945.00 12-10 3477 2,130.00 12-26 2,567.30 12-15 3479 3,080.00 12-29 2,836.00 12-27 3480 600.00 12-30 1,025.00 12-30 3482 475.50 Total $18,152.90 12-29 3483 1,140.00 12-31 3485 540.80 $15,438.70 The cash records per books for December showed the following. Cash Receipts Cash Payments Journal Journal Date Number Amount Date Number Amount Date Amount 12-1 3475 $1,640.70 12-20 3482 $475.50 12-3 $1,211.60 12-2 3476 1,300.00 12-22 3483 1,140.00 12-7 2,365.10 12-2 3477 2,130.00 12-23 3484 798.00 12-15 2,672.70 12-4 3478 621.30 12-24 3485 450.80 12-20 2,954.00 12-8 3479 3,080.00 12-30 3486 1,889.50 12-25 2,567.30 12-10 3480 600.00 Total $14,933.20 12-28 2,836.00 12-17 3481 807.40 12-30 1,025.00 12-31 1,690.40 Total $17,322.10 The bank statement contained two memoranda: 1. A credit of $4,145 for the collection of a $4,000 note for Backhaus Company plus interest of $160 and less a collection fee of $15. Backhaus Company has not accrued any interest on the note. 2. A debit of $572.80 for an NSF check written by D. Chagnon, a customer. At December 31, the check had not been redeposited in the bank. At December 31 the cash balance per books was $12,985.20, and the cash balance per the bank statement was $20,654.30. The bank did not make any errors, but two errors were made by Backhaus Company. Incorrect. Using the four steps in the reconciliation procedure, complete the bank reconciliation at December 31. (List amounts from largest to smallest eg 10, 5, 3, 2. List outstanding checks numbers from smallest to largest e.g. 3, 6, 10. Round answers to 2 decimal places, e.g. 10.50. Enter all amounts as positive amounts and subtract where necessary.) BACKHAUS COMPANY Bank Reconciliation December 31, 2008 Cash balance per bank statement $ 20,654.30 Add: Deposits in transit Less: Outstanding checks $ Adjusted cash balance per bank $ Cash balance per books $ 12,985.20 Add: Note collected by bank 4,145.00 17,130.20 Less: NSF check $ 572.80 Error in recording check 90.00 Adjusted cash balance per books $ Incorrect. Prepare the adjusting entries based on the reconciliation. (Hint: The correction of any errors pertaining to recording checks should be made to Accounts Payable. The correction of any errors relating to recording cash receipts should be made to Accounts Receivable.) (For multiple debit/credit entries, list amounts from largest to smallest eg 10, 5, 3, 2. Round answers to 2 decimal places, e.g. 10.50.) Date Account / Description Debit Credit Dec. 31 Cash $ 4,145.00 Miscellaneous expense $ 15.00 Notes receivable $ 4,000.00 Interest revenue $ 160.00 (To record collection of note receivable by bank.) Dec. 31 Accounts receivable-D.Chagnon $ 572.80 Cash $ 572.80 (To record NSF check.) Dec. 31 $ 90.00 $ 90.00 (To record error on check no.3485.) Dec. 31 $ $ (To record error in deposit.) P8-2A Winningham Company maintains a petty cash fund for small expenditures. The following transactions occurred over a 2-month period. July 1 Established petty cash fund by writing a check on Cubs Bank for $200. 15 Replenished the petty cash fund by writing a check for $196.00. On this date the fund consisted of $4.00 in cash and the following petty cash receipts: freight-out $94.00, postage expense $42.40, entertainment expense $46.60, and miscellaneous expense $11.20. 31 Replenished the petty cash fund by writing a check for $192.00. At this date, the fund consisted of $8.00 in cash and the following petty cash receipts: freight-out $82.10, charitable contributions expense $45.00, postage expense $25.50, and miscellaneous expense $39.40. Aug. 15 Replenished the petty cash fund by writing a check for $187.00. On this date, the fund consisted of $13.00 in cash and the following petty cash receipts: freight-out $75.60, entertainment expense $43.00, postage expense $33.00, and miscellaneous expense $37.00. 16 Increased the amount of the petty cash fund to $300 by writing a check for $100. 31 Replenished petty cash fund by writing a check for $284.00. On this date, the fund consisted of $16 in cash and the following petty cash receipts: postage expense $140.00, travel expense $95.60, and freight-out $47.10. Incorrect. Journalize the petty cash transactions. (List multiple debit/credit entries in order of magnitude. Round answers to 2 decimal places, i.e. $35.87) Date Account / Description Debit Credit July 1 Petty cash $ 200 Cash $ 200 July 15 Freight-out $ 94.00 Entertainment expense $ 46.60 Postage expense $ 42.40 Miscellaneous expense $ 11.20 Cash over and short $ 1.80 Cash $ 196 July 31 Freight-out $ 82.10 Charitable contributions expense $ 45.00 Miscellaneous expense $ 39.40 Postage expense $ 25.50 Cash $ 192 Aug. 15 Freight-out $ 75.60 Entertainment expense $ 43.00 Miscellaneous expense $ 37.00 Postage expense $ 33.00 $ $ Aug. 16 Petty cash $ 100 Cash $ 100 Aug. 31 Postage expense $ 140.00 Travel expense $ 95.60 Freight-out $ 47.10 Cash over and short $ 1.30 Cash $ 284 Incorrect. Post to the Petty Cash account. (If answer is zero, please enter 0, do not leave any fields blank.) Cash No. 101 Date Explanation Ref. Debit Credit Balance July 1 CP $ 200 $ $ Aug. 16 CP $ 100 $ $ Your answer has been saved and sent to the instructor. See Gradebook for score details. What internal control features exist in a petty cash fund?