Question : 160. Journalize the entries to record the following:Sept. 1 Established a : 1227216

 

160. Journalize the entries to record the following:Sept.   1    Established a petty cash fund of $350Sept. 30    The amount of cash in the petty cash fund is now $130.  The fund is replenished based on the following receipts: office supplies, $116; postage $100.Record any discrepancy in the cash short and over account.Journal

Date

Description

Post. Ref.

Debit

Credit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

161. 

(a)

Where are cash equivalents disclosed in the financial statements?

(b)

List three examples of cash equivalents.

 

 

 

162. You began your new job as the accountant for Morton Company.  You were surprised to find that the company had a $2,000 petty cash fund, which sits in the break room.  The President of the company told you: “Our petty cash system here works quite smoothly.  Since everyone is honest here, everyone has access to the fund for incidentals that might pop up in the course of the business day.  Most of these situations don’t have any receipts tied to them, so I just put the money back in the fund when my secretary tells me that we have run out and debit the amount to Miscellaneous Expense.”  Required:  (a) Should you implement some controls on petty cash? Why? (b) If so, what controls could be used for petty cash? 

163. Why would a bank require a company to maintain a compensating balance? 

164. Farm Store, Inc. reported the following data in its December 31, 2011 annual report. 

Cash and cash equivalents

$1,050,000

Negative cash flows from operations

(420,000)

 

 

Required:(1)   What is the company’s “cash burn” per month?(2)   What is the company’s ratio of cash to monthly cash expenses?(3)   Interpret the ratio you computed in part 2.  What are the implications for Farm Store, Inc. 

165. Peaches, Inc. reported the following date in it’s December 31, 2011 annual report: 

Cash and cash equivalents

$200,000

Cash flow from operations

(120,000)

 

 

Required:(1)   What is the company’s “cash burn” per month?(2)   What is the company’s ratio of cash to monthly cash expenses? 

166. The following data is from the Miser Company for years ended 2008-2011. 

 

Year Ending December 31 Data

 

 

2008

2009

2010

2011

Cash & Cash Equivalents

23,788

45,776

52,899

82,744

Cash Flow from Operations

(32,556)

(47,880)

(32,357)

(16,450)

 

 

 

 

 

Calculate the following:

 

Year Ending December 31 Data

 

 

2008

2009

2010

2011

Monthly Cash Expenses

 

 

 

 

Ratio of Cash to Monthly Cash Expenses