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Stihl Repairs completed the following petty cash transactions during July 2014:
July 5 Prepared a $500 cheque, cashed it, and turned the proceeds and the petty cash box over
to Bob Stuart, the petty cashier.
6 Paid $108.00 COD charges on merchandise purchased for resale. Stihl Repairs uses the
perpetual inventory method to account for merchandise inventory.
14 Reimbursed Collin Dodge, the manager of the business, $8.26 for office supplies purchased.
31 Bob Stuart sorted the petty cash receipts by accounts affected and exchanged them for a
cheque to reimburse the fund for expenditures. However, there was $233.94 in cash in the fund.
In addition, the size of the petty cash fund was decreased to $300.
Required
1. Prepare a General Journal entry to record establishing the petty cash fund.
2. Prepare a summary of petty cash payments similar to Exhibit 8.2 that has these categories:
delivery expense, auto expense, postage expense, merchandise inventory, and office supplies.
3. Prepare the General Journal entry to record the reimbursement and the increase of the fund.
Analysis Component: You supervise Bob Stuart, the petty cashier, and while reviewing the
accounts you notice that the Cash Over/Short Expense account has a balance for the seven
months ended July 31, 2014, of $300. Given the size of the petty cash account, does this
balance appear to be unusual? Explain and identify any concerns that you might have.
ANSWER
https://solvedquest.com/stihl-repairs-completed-the-following-petty-cash-transactions-during-
july/