INTERMEDIATE ACCT 1 –Lecture no.

2 – PETTY CASH FUND AND BANK RECONCILIATION

PETTY CASH FUND

IMPREST FUND SYSTEM
2022
Nov. 10 The entity established an imprest fund of P10,000.
29 Replenished the fund. The petty cash items include the following:

Currency and coin 2,000

Supplies 5,000
Telephone 1,800
Postage 1,200

Dec. 31 The fund was not replenished. An adjustment is necessary to record the unreplenished expenses.
The fund is composed of the following: currency and coin P7,000, supplies P1,500, postage P500,
miscellaneous expense P1,000.
2023
Jan 01 Reversing entries for the adjustment made on Dec. 31, 2022.

FLUCTUATING FUND SYSTEM

Illustration
Nov. 10 The entity established a petty cash fund of P10,000.

11-28 Petty cash disbursements amounted to P8,000.

29 Issued a check for P10,000 to replenish the fund.

Dec. 1-30 Petty cash expenses amounted to P9,000.

31 Issued a check for P15,000 to replenish the fund.

BANK RECONCILIATION
Illustration

The cash records of Company X show the following for the month of January.

CASH RECEIPTS CASH DISBURSEMENTS

Jan. 5 60,000 Jan. 6 Check No. 721 5,000

13 20,000 7 Check No. 722 10,000
25 30,000 10 Check No. 723 18,000
31 40,000 14 Check No. 724 2,000
150,000 28 Check No. 725 37,000
31 Check No. 726 28,000
100,000

The general ledger of the company shows the cash in bank account for January as follows:

Cash in bank – First Bank

Jan. 31 CR 150,000 Jan. 31 CD 100,000

The balance of the cash in bank on the depositor’s book is P50,000.

Bank statement

The following is the bank statement for January received from the First Bank:
In account with: No. 775
Company X FIRST BANK
Quezon City Manila, Philippines
_____________________________________________________________________________________
Date Check No. Withdrawals Deposits Balance
Jan. 6 60,000 60,000
8 721 5,000 55,000
11 722 10,000 45,000
12 723 18,000 27,000
14 20,000 47,000
17 724 2,000 45,000
26 30,000 75,000
26 15,000 CM 90,000
30 5,000 RT 85,000
30 1,000 SC 84,000
_____________________________________________________________________________________

Code: CM – Credit memo SC – Service charge

DM – Debit memo RT – Returned check

The following data are gathered in connection with the CM and DM appearing on the bank statement:

a. The CM of P15,000 on January 26 represents proceeds of note collected by the bank in favor of the
company.

b. The RT of P5,000 represents check of customer deposited previously but returned by the bank because of
“no sufficient fund” or NSF.