Superior Cabinets maintains a petty cash fund for minor

business #2717
Superior Cabinets maintains a petty cash fund for minor business expenditures. The petty cash
custodian, Mo Smith, describes the events that occurred during the last two months:a. I
established the fund by cashing a Superior Cabinets’ check for $ 300 made payable to me. b.
Liz Clay provided a receipt for $ 50 for various supplies. I paid $ 50 cash to her. c. James Flyer
provided a $ 70 taxi receipt, so I paid $ 70 cash to him. d. Ricky Ricota claimed to do
photocopying for Superior Cabinets at The UPS Store for $ 97 but had misplaced the receipt. I
took him at his word and paid $ 97 cash to him. e. On the last day of the month, I prepared a
summary of expenditures and requested the fund be replenished. I received and cashed a
Superior Cabinets’ check for $ 217, placing the cash into the locked cash box. f. James Flyer
provided receipts for taxi costs ($ 75), so I paid $ 75 cash to him. g. Woo Riun provided a $ 147
receipt from a local delivery company for an expedited delivery to a customer. I paid her $ 147
cash. h. Ricky Ricota claimed to have purchased $ 35 of envelopes, but again he had
misplaced the receipt. He showed me a big stack of envelopes, so I paid him $ 35 cash. i. After
requesting that the fund be replenished, I received and cashed a Superior Cabinets’ check for $
257, placing the cash into the locked cash box. j. After suggesting that the petty cash fund be
increased, I received and cashed a Superior Cabinets’ check for $ 100 cash, which I placed in
the locked cash box. Required:1. Prepare journal entries where required.2. If Superior Cabinets
has $ 1,000 cash in the bank, $ 500 of government Treasury bills purchased last month with a
six- week maturity, and $ 750 of cash set aside for legal reasons, how much will the company
report on the balance sheet as “Cash and Cash Equivalents”?View Solution:
Superior Cabinets maintains a petty cash fund for minor business

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