Reference no: EM133329621

Question: Make a disbursement journal. (use consecutive cheque numbers, starting at no. 124):

The column headings found on the disbursement journal indicate the information required; date (as specified below), number (cheque number), description (as shown in brackets below), category (office supplies, payroll, entertainment, rent, electricity, government remittance, internet, donation, or drawing for personal use), and amount of the disbursement cheque. Use your judgement to select an appropriate category of the disbursement.

January

2. Establish petty cash fund for $100

2. The doctor entertained at a dinner party and spent $50 (Romeo's Cafe)

2. Paid Purolator $17.62 for delivery of laboratory reports

3. Purchased letterhead and envelopes $78.29 (ABC Supplies)

3. Paid January rent $1200 (Medical Services Inc.)

4. Paid automobile credit card charges for gas and oil $71.65 (Jay's Gas Bar)

5. Paid your wages $750, and janitor's wages $320 (Don James)

5. The doctor withdrew $350 for personal use

8. Sent cheque to Power Company for $147

8. Made $100 contribution to the United Way

9. Paid Internet service provider $56.50

11. Paid Campbell's Florist $65 for roses sent to the doctor's wife for anniversary

12. Paid your wages $750, and janitor's wages $320 (Don James)

12. The doctor withdrew $350

13. Submitted cheque to the Receiver General of Canada for income tax $290; employment insurance, $15.18; Canada Pension $12.92

13. Reimbursed petty cash $47.41

Examine your entry on January 2 for the dinner party. If a businessperson entertains for the purpose of promoting the business, the expense is tax-deductible. However, a businessperson must not charge personal expenses against the business. You may have entered the $50 dinner expense under "Travel and Entertainment," assuming it was a business engagement. Or you may have assumed it was a personal engagement, in which case the entry would be made under "Drawings."