50.1K

Verified Solution

Link Copied!

P8-32B Accounting for petty cash transactions Suppose that on September 1, Cool Gyrations, a disc jockey service, crean cash fund with an imprest balance of $350. During September, Ruth Man custodian, signs the following petty cash tickets: rvice, creates a petty er. Ruth Mangan, fund Petty Cash Ticket Number Item Amount $ 25 Postage for package received Office party Two boxes of stationery Printer cartridges Business dinner 65 On September 30, prior to replenishment, the fund contains these tickets plus cash of $210. The accounts affected by petty cash payments are Office Supplies, Entertain- ment Expense, and Postage Expense. Requirements 1. On September 30, how much cash should this petty cash fund hold before it is replenished? 2. Journalize all required entries to (a) create the fund and (b) replenish it. Include explanations. 3. Make the entry on October 1 to increase the fund balance to $425. Include an explanation. DO 200 P8-30B Correctin would be shown in the ledger for cash receipts? Correcting internal control weaknesses dach of the following situations has an internal control weakness. Jade Applications has decided that one way to cut costs in the upcoming year fire the external auditor. The busine business believes that the internal auditor should be able to efficiently monitor the company's internal controls. Learning a. Jade Applic In an effort to minimize the amount of paperwork. Ross Homes has decided that it will not keep copies of customer invoices related to sales revenue, Ross beheves this effort will minimize the amount of data storage the company will have to pay for. c. Elle Bee, a trusted employee for many years, has never taken a vacation. The owner believes that he's lucky that she is so committed to her job. d. The Medicine Chest Company keeps a small petty cash fund to handle small cash transactions. Because no one wants to volunteer to be the custodian, the business manager has decided that all employees should have access to the petty cash. She figures that as long as each employee fills out a petty cash ticket, then there are proper controls in place. e. Due to the cost of maintaining the security cameras, Wings and More has decided that it will remove the cameras that monitor the cash register. f. Bryan Miller, manager of Hardware Emporium, prides himself on hiring exceptionally skilled employees who need no training to do their jobs. Requirements 1. Identify the missing internal control characteristics in each situation. 2. Identify the possible problem caused by each control weakness. 3. Propose a solution to each internal control

Answer & Explanation Solved by verified expert

See Answer