Question

Fresh Foods established a petty cash fund of $275 on January 2. On January 31, the fund contained cash of $72.25 and vouchers for the following cash payments:

Maintenance expense	$	82.25
Office supplies		84.80
Transportation expense		32.50

The three distinct accounting events affecting the petty cash fund for the period were (1) establishment of the fund, (2) reimbursements made to employees, and (3) recognition of expenses and replenishment of the fund.

1.

value:
10.00 points

Required information

Required

a.	Record each of the three events in a horizontal statements model like the following one. (In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or a financing activity (FA). Use NA to indicate that an account was not affected by the event. Enter any decreases to account balances with a minus sign. Round your final answers to 2 decimal places.)

     

Fresh Foods established a petty cash fund of $275 on January 2. On January 31, the fund contained cash of $72.25 and vouchers for the following cash payments:

Maintenance expense	$	82.25
Office supplies		84.80
Transportation expense		32.50

The three distinct accounting events affecting the petty cash fund for the period were (1) establishment of the fund, (2) reimbursements made to employees, and (3) recognition of expenses and replenishment of the fund.

1.

value:
10.00 points

Required information

Required

a.	Record each of the three events in a horizontal statements model like the following one. (In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or a financing activity (FA). Use NA to indicate that an account was not affected by the event. Enter any decreases to account balances with a minus sign. Round your final answers to 2 decimal places.)

     

Fresh Foods established a petty cash fund of $275 on January 2. On January 31, the fund contained cash of $72.25 and vouchers for the following cash payments:

Maintenance expense	$	82.25
Office supplies		84.80
Transportation expense		32.50

The three distinct accounting events affecting the petty cash fund for the period were (1) establishment of the fund, (2) reimbursements made to employees, and (3) recognition of expenses and replenishment of the fund.

1.

value:
10.00 points

Required information

Required

a.	Record each of the three events in a horizontal statements model like the following one. (In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or a financing activity (FA). Use NA to indicate that an account was not affected by the event. Enter any decreases to account balances with a minus sign. Round your final answers to 2 decimal places.)

     

FRESH FOODS

Statements Model

Assets

=

Stockholders' Equity

Revenue

–

Expense

=

Net Income

Cash Flow

No

Cash

+

Petty Cash

=

Retained Earnings

1.

2.

3.

b.	Record the events in general journal format. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to 2 decimal places.)

Journal entry worksheet

Note: Enter debits before credits.

Record entry for petty cash fund.

Event	General Journal	Debit	Credit
1

Journal entry worksheet

Note: Enter debits before credits.

Record entry for reimbursements made to employees.

Event	General Journal	Debit	Credit
2

Journal entry worksheet

Note: Enter debits before credits.

Record entry for recognition of expenses and replenishment of the fund.

Event	General Journal	Debit	Credit
3

Answer 1

Fresh Foods Inc

1. Statements model:

Assets

=

Stockholders' Equity

Revenue

-

Expenses

=

Net Income

Cash Flow

No.

Cash

+

Petty Cash

=

Retained Earnings

Increase/(Decrease)

1

($275)

+

$275

=

NA

NA

NA

NA

NA

2

NA

NA

NA

NA

NA

NA

NA

3

($199.55)

NA

($199.55)

NA

($199.55)

($199.55)

($199.55)

OA

Note: $275 - $72.25 = $202.75

1. Journal entry worksheet:

Date/Event	Account Titles and Explanation	Ref. No.	Debit	Credit
1	Petty Cash		$275
	Cash			$275
	(To established petty cash fund)
2	No ENTRY
3	Maintenance Expense		$82.25
	Office Supplies Expense		$84.80
	Transportation Expense		$32.50
	Cash Short and Over		$3.20
	Cash			$202.75

Note: Cash Short and Over = $202.75 - $199.55 = $3.20