EXERCISE 8.

6
Procedure IC good or weak? Related internal control
principle
1. Good Human Resource Controls
2. Weak Establishment of
Responsibility
3. Weak Segregation of Duties
4. Good Independent Internal
Verification
5. Good Physical Controls

EXERCISE 8.8

Mar. 1 Petty Cash.................................................................. 100

Cash..................................................................... 100

15 Postage Expense....................................................... 39
Freight-Out.................................................................. 21
Miscellaneous Expense............................................. 11
Travel Expense........................................................... 24
Cash Over and Short................................................. 3
Cash (€100 - €2).................................................. 98

20 Petty Cash................................................................... 75
Cash..................................................................... 75
EXERCISE 8.11

(a) CRANE VIDEO

Bank Reconciliation
July 31

Cash balance per bank statement..................................... HK $7,263

Add: Deposits in transit.................................................... 1,300
8,563
Less: Outstanding checks................................................. 591
Adjusted cash balance per bank........................................ HK $7,972

Cash balance per books..................................................... HK $7,284

Add: Collection of note receivable
(HK $700 plus accrued interest HK $36,
less collection fee HK $20)...................................... 716
8,000
Less: Bank service charge................................................ 28
Adjusted cash balance per books...................................... HK $7,972

(b) July 31 Cash..................................................................... 716

Miscellaneous Expense..................................... 20
Notes Receivable........................................ 700
Interest Revenue......................................... 36
31 Miscellaneous Expense..................................... 28
Cash............................................................. 28
 PROBLEM 8.3

(a) Aug. 1 Petty Cash................................................. 200.00

Cash................................................... 200.00

15 Freight-Out................................................ 74.40
Entertainment Expense............................ 36.00
Postage Expense...................................... 33.70
Miscellaneous Expense........................... 27.50
Cash Over and Short................................ 3.40
Cash................................................... 175.00

16 Petty Cash................................................. 200.00

Cash................................................... 200.00

31 Postage Expense...................................... 145.00

Entertainment Expense............................ 90.60
Freight-Out................................................ 46.40
Cash Over and Short................................ 1.00
Cash................................................... 283.00

(b) Petty Cash

8/1 200
8/16 200
8/31 Bal. 400

(c) The internal control features of a petty cash fund include:

(1) A custodian is responsible for the fund.
(2) A pre-numbered petty cash receipt signed by the custodian and
the individual receiving payment is required for each payment
from the fund.
(3) The treasurer’s office examines all payments and stamps
supporting documents to indicate they were paid when the fund is
replenished.
(4) Surprise counts can be made at any time to determine whether
Is the fund is intact.
 PROBLEM 8.5

(a) SHOU FLORISTS

Bank Reconciliation
December 31, 2020

Cash balance per bank statement................ HK$19,239.10

Add: Deposits in transit.............................. 1,690.40
20,929.50
Less: Outstanding checks
No. 3470........................................... HK $720.10
No. 3474........................................... 1,050.00
No. 3478........................................... 621.30
No. 3481........................................... 807.40
No. 3484........................................... 798.00
No. 3486........................................... 889.50 4,886.30
Adjusted cash balance per bank.................. HK$16,043.20
Cash balance per books............................... HK$13,985.20
Add: Electronic funds transfer received
............................................................. 2,242.00
16,227.20
Less: Check printing fee.............................. HK$ 85.00
Error in recording check No. 3485.... 90.00*
Error in 12-21 deposit
(HK $2,954 – HK $2,945)............... 9.00 184.00
Adjusted cash balance per books................ HK$16,043.20
*HK $540.80 – HK $450.80
(b) Dec. 31 Cash............................................... 2,242.00
Accounts Receivable........... 2,242.00
31 Bank Change Expense................... 85.00
Cash...................................... 85.00
31 Accounts Payable......................... 90.00
Cash...................................... 90.00

31 Accounts Receivable.................... 9.00

Cash...................................... 9.00
 PROBLEM 8.6

(a) TIMMINS GROW-FAST

Bank Reconciliation
May 31, 2020

Cash balance per bank statement..................... £6,968.00

Add: Deposits in transit................................... £1,880.15
Bank error—Tomins................................ 360.00 2,240.15
9,208.15
Less: Outstanding checks................................ 276.25
Adjusted cash balance per bank....................... £8,931.90
Cash balance per books..................................... £6,738.90
Add: Electronic funds
transfer received................................. 2,690.00
9,428.90
Less: NSF check................................................ £ 380.00
Error in May 12 deposit*.......................... 50.00
Error in recording check No. 1181**...... 27.00
Check printing charge............................. 40.00 497.00
Adjusted cash balance per books..................... £8,931.90

*₤933.15  ₤883.15
**₤685  ₤658
(b) May 31 Cash.................................................... 2,690
Accounts Receivable................. 2,690

31 Accounts Receivable—
S. Ballard.......................................... 380
Cash............................................. 380

31 Sales Revenue.................................... 50
Cash............................................. 50

31 Accounts Payable—H. Moses........... 27

Cash............................................. 27

31 Bank Charge Expense....................... 40

Cash............................................. 40