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Answer Key and Solutions: Handout On Cash and Cash Equivalents - Problem No. 5

The document discusses two methods for handling petty cash funds: the imprest fund system and the fluctuating fund system. It provides a comparison of the accounting entries for each system on sample dates. It also includes an analysis comparing the petty cash fund balances per the records and the actual counted amount, noting a loss on a cash shortage.

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Rujean Salar Altejar
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88 views2 pages

Answer Key and Solutions: Handout On Cash and Cash Equivalents - Problem No. 5

The document discusses two methods for handling petty cash funds: the imprest fund system and the fluctuating fund system. It provides a comparison of the accounting entries for each system on sample dates. It also includes an analysis comparing the petty cash fund balances per the records and the actual counted amount, noting a loss on a cash shortage.

Uploaded by

Rujean Salar Altejar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Answer Key and Solutions: Page 1 of 2

Handout on Cash and Cash Equivalents - Problem No. 5

Date Particulars Imprest Fund System Fluctuating Fund System


Dec 15, 2017 Establishment of the fund Petty cash fund 20,000 Petty cash fund 20,000
Cash in bank 20,000 Cash in bank 20,000

Dec 16-22, 2017 Charges against the fund No entry Supplies expense 1,500
Transportation expense 2,000
Miscellaneous expense 1,000
Petty cash fund 4,500

Dec 23-30, 2017 Charges against the fund No entry * Supplies expense 2,500
*Supplies expense (P4,000 - P1,500) ** Transportation expense 3,000
**Transportation expense (P5,000 - P2,000) *** Miscellaneous expense 1,000
***Miscellaneous expense (P2,000 - P1,000) Receivable from employees 5,000
Petty cash fund 11,500

Dec 31, 2017 Adjusting entry Supplies expense 4,000 No entry


Transportation expense 5,000
Miscellaneous expense 2,000
Receivable from employees 5,000
Petty cash fund 16,000
Answer Key and Solutions: Page 2 of 2
Handout on Cash and Cash Equivalents - Problem No. 5

Date Particulars Imprest Fund System Fluctuating Fund System


Jan 1, 2018 Reversing entry Petty cash fund 16,000 No entry
Supplies expense 4,000
Transportation expense 5,000
Miscellaneous expense 2,000
Receivable from employees 5,000

Jan 2-8, 2018 Charges against the fund No entry * Supplies expense 3,000
*Supplies expense (P7,000 - P4,000) ** Transportation expense 3,000
**Transportation expense (P8,000 - P5,000) *** Miscellaneous expense 1,500
***Miscellaneous expense (P3,500 - P2,000) Receivable from employees 5,000
Petty cash fund 2,500

Jan 09, 2019 Replenishment and recognition Supplies expense 7,000 Loss on cash shortage 150
of loss on cash shortage Transportation expense 8,000 Petty cash fund 150
Miscellaneous expense 3,500
Loss on cash shortage 150 Petty cash fund 18,650
Cash in bank 18,650 Cash in bank 18,650

OR Loss on cash shortage 150


Petty cash fund 18,500
Cash in bank 18,650

Increase in the fund Petty cash fund 5,000 Petty cash fund 5,000
Cash in bank 5,000 Cash in bank 5,000
ANALYSIS:
PCF balance, per record - Dec 31, 2017 (P20,000 - P16,000) Php 4,000 PCF balance, per count - Jan 09, 2019 Php 1,350
Collection of "Receivable from employees" account 5,000 Charges for: Supplies 7,000
Charges against the fund from Jan 02 - 18, 2018 (7,500) Transporation 8,000
PCF balance, per record - Jan 09, 2019 1,500 Miscellaneous 3,500
PCF balance, per count - Jan 09, 2019 1,350 Total cash and unreplenished vouchers 19,850
Loss on cash shortage Php 150 Original amount established for PCF 20,000
Loss on cash shortage Php 150

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