Blues Music Center had the following petty cash transactions in March of the current year. March 5 Wrote a $250 check, cashed it, and gave the proceeds and the petty cashbox to Jen Rouse, the petty cashier.
6 Paid $12.50 COD shipping charges on merchandise purchased for resale, terms FOB shipping point. Blues uses the perpetual system to account for merchandise inventory.
11 Paid $10.75 in delivery expense on merchandise sold to a customer, terms FOB destination.
12 Purchased office file folders for $14.13 that are immediately used.
14 Reimbursed Bob Geldof, the manager, $11.65 for office supplies purchased and used.
18 Purchased office printer paper for $20.54 that is immediately used.
27 Paid $45.10 COD shipping charges on merchandise purchased for resale, terms FOB shipping point.
28 Paid postage expense of $18.
30 Reimbursed Geldof $56.80 for mileage expense.
31 Cash of $61.53 remained in the fund. Sorted the petty cash receipts by accounts affected and
exchanged them for a check to reimburse the fund for expenditures.
31 The petty cash fund amount is increased by $50 to a total of $300.
3. Prepare the journal entries (in dollars and cents) for part 2 to both (a) reimburse and (b) increase the fund amount
(a) Journal entry is passed for reimbursement in step 2
(b) Petty cash fund is increased by $50, and the journal entry is passed in step 2
Petty cash- A petty cash fund always has a little amount of money, which is used to pay minor expenses of the business. Petty cash is a current asset and should be recorded on the company balance sheet.
Office Supplies Expense
Cash Over and Short
To reimburse the petty cash fund.
To increase the petty cash fund.
For each of these five separate cases, identify the principle(s) of internal control that is violated. Recommend what the business should do to ensure adherence to principles of internal control.
2. Marker Theater has a computerized order-taking system for its tickets. The system is active all week and backed up every Friday night.
BTN 6-1 Refer to Apple’s financial statements in Appendix A to answer the following.
3. Compute the days’ sales uncollected (rounded to two decimals) as of September 26, 2015, and September 27, 2014. Has the collection of receivables improved? Are accounts receivable an important asset for Apple? Explain. Fast Forward
An internal control system consists of all policies and procedures used to protect assets, ensure reliable accounting, promote efficient operations, and urge adherence to company policies. Evaluate each of the following statements and indicate which are true and which are false regarding the objectives of an internal control system.
3. The main objective of internal control procedures is best accomplished by designing an operational system with managerial policies that protect the assets from waste, fraud, and theft.
For each of the following items a through g, indicate whether its amount (1) affects the bank or book side of a bank reconciliation, (2) represents an addition or a subtraction in a bank reconciliation, and (3) requires an adjusting journal entry.
Bank or Book Side Add or Subtract Adj. Entry or Not
a. Interest on cash balance . . . . . . . . . . . . . . .
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