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?
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