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    Activity 2 - Cash and Cash Equivalents

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    Sean Lester S. Nombrado
    The company established an 8,000 petty cash fund on May 2. From May 2-20, various expenses were paid from petty cash totaling 6,500. On May 18, employees paid back 1,200 IOUs. From May 20-31, additional expenses of 1,670 were paid. On May 31, a count revealed 5,700 remaining in petty cash, requiring an adjustment.

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    Activity 2 - Cash and Cash Equivalents

    Uploaded by

    Sean Lester S. Nombrado
    458 views2 pages
    The company established an 8,000 petty cash fund on May 2. From May 2-20, various expenses were paid from petty cash totaling 6,500. On May 18, employees paid back 1,200 IOUs. From May 20-31, additional expenses of 1,670 were paid. On May 31, a count revealed 5,700 remaining in petty cash, requiring an adjustment.

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    ACTIVITY 2 - CASH AND CASH EQUIVALENTS

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    The company established an 8,000 petty cash fund on May 2. From May 2-20, various expenses were paid from petty cash totaling 6,500. On May 18, employees paid back 1,200 IOUs. From May 20-31, additional expenses of 1,670 were paid. On May 31, a count revealed 5,700 remaining in petty cash, requiring an adjustment.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    458 views2 pages

    Activity 2 - Cash and Cash Equivalents

    Uploaded by

    Sean Lester S. Nombrado
    The company established an 8,000 petty cash fund on May 2. From May 2-20, various expenses were paid from petty cash totaling 6,500. On May 18, employees paid back 1,200 IOUs. From May 20-31, additional expenses of 1,670 were paid. On May 31, a count revealed 5,700 remaining in petty cash, requiring an adjustment.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    AC7&8 – Intermediate Accounting

    Activity 2A – Cash and cash Equivalents


    Panda Company established a petty cash fund to help ensure internal control over its small
    expenditures. The following are the transactions affecting the petty cash fund for the month of May
    2019:

    1. On May 2, the company established a petty cash fund in the amount of P8,000.
    2. The following were paid by the petty cash custodian from May 2 through May 20.
    Freight on merchandise purchases P2,500
    Freight on merchandise sold 3,000
    Supplies purchased 800
    OIUs from employees 1,200
    3. On May 18, the employees paid their IOUs as indicated above (the advances were granted on
    May 10; the proceeds from such collection were returned to the petty cash fund).
    4. On May 20, the fund was replenished.
    5. Payments from petty cash fund from May 20 through May 31 are as follows:
    Freight on merchandise purchases P1,200
    Transportation of messenger 150
    Medicines for employees 320
    IOUs from employees 500
    6. A count of the fund on May 31 revealed bills and coins in the petty cash fund to P5,700.

    The company’s reporting period ends May 31.


    Required:
    Prepare journal entries for the above transactions including any adjustment on May 31, 2019.
    Source: Intermediate Accounting Part 1 – Robles and Empleo
    Activity 2B – Cash and cash Equivalents
    A count of petty cash fund in the morning of January 5, 2020 revealed the following:

    Bills and coins P4,560


    Petty cash vouchers
    dated December 2019 3,140
    dated January 2020 1,130
    IOUs (without supporting vouchers)
    dated December 2019 1,800
    dated January 2020 1,000
    Unsigned payroll envelope 2,000
    (the envelope has been opened,
    there is no money inside)
    The imprest balance of the petty cash fund is P10,000.
    Required:
    (a) Determine the amount of petty cash fund that will be included in the cash balance at December
    31, 2019.
    (b) Determine the amount of cash shortage or overage.
    (c) Prepare the necessary adjusting entry to bring the petty cash fund to its correct amount at
    December 31, 2019.
    Source: Intermediate Accounting Part 1 – Robles and Empleo

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