Reference no: EM13875137

Superior Cabinets maintains a petty cash fund for minor business expenditures. The petty cash custodian, Mo Smith, describes the events that occurred during the last two months:

a. I established the fund by cashing a Superior Cabinets' check for $ 300 made payable to me.

b. Liz Clay provided a receipt for $ 50 for various supplies. I paid $ 50 cash to her.

c. James Flyer provided a $ 70 taxi receipt, so I paid $ 70 cash to him.

d. Ricky Ricota claimed to do photocopying for Superior Cabinets at The UPS Store for $ 97 but had misplaced the receipt. I took him at his word and paid $ 97 cash to him.

e. On the last day of the month, I prepared a summary of expenditures and requested the fund be replenished. I received and cashed a Superior Cabinets' check for $ 217, placing the cash into the locked cash box.

f. James Flyer provided receipts for taxi costs ($ 75), so I paid $ 75 cash to him.

g. Woo Riun provided a $ 147 receipt from a local delivery company for an expedited delivery to a customer. I paid her $ 147 cash.

h. Ricky Ricota claimed to have purchased $ 35 of envelopes, but again he had misplaced the receipt. He showed me a big stack of envelopes, so I paid him $ 35 cash.

i. After requesting that the fund be replenished, I received and cashed a Superior Cabinets' check for $ 257, placing the cash into the locked cash box.

j. After suggesting that the petty cash fund be increased, I received and cashed a Superior Cabinets' check for $ 100 cash, which I placed in the locked cash box.

Required:

1. Prepare journal entries where required.

2. If Superior Cabinets has $ 1,000 cash in the bank, $ 500 of government Treasury bills purchased last month with a six- week maturity, and $ 750 of cash set aside for legal reasons, how much will the company report on the balance sheet as Cash and Cash Equivalents?