Question

Jim Sullivan is the owner and manager of Auto Spa. Auto Spa provides various car wash and car detailing services. Auto Spa also sells snacks and gift items in its waiting area. Auto Spa has one cash register, where all payments from customers are received. There is a $400 change fund in the cash register at the beginning of each day. There are two cash register clerks, George and Alice, who work two different shifts during the day. Jim is quite busy as an owner and operator of the car wash and trusts George and Alice completely. Jim does not see the need to count out the cash register drawers with George or Alice after their shifts are ended. Additionally, Jim prints out a cash register tape at the end of the day but does not compare it to the deposit. During the first week of August, Jim noticed an increase in business. However, the cash deposits to the bank were less than Jim thought they should be. He has contacted you for advice. You have compiled the sales per the cash register tapes, and the cash counts, for the period from August 1 to August 7. These amounts are as follows: Calculate the total amount of cash sales and cash shortages for the period August 1 to August 7. Prepare a journal entry dated August 7 that summarizes the cash sales and cash shortages from August 1 to August 7.

Answer 1

Answer:

Cash Sales : we add up all the cash sales for the week to get total cash sales, cash sales will be from cash receipts journal and or cash register tapes.

Cash shortages will be the difference between cash sales and cash counts or cash on hand.

Journal Entry

Debit Cash ( as per the cash count), Debit Cash shortage(difference and is an expense) Credit cash Sales (as per register)

Explanation:

The Question is incomplete but when dealing with cash there must be internal controls put in place to monitor or reduce any potential risks, risks like cash shortages. Jim must everyday count the cash with the cashier that was at the cash register. Daily the cash register tape must be compared to the deposits that is a control to avoid cash shortages and each employee must have separate register tapes or there must be identification and or a way to know which clerk made what transactions.

Answer 2

Answer:

) Cash sales $15,696.00, Cash shortages ($1,798.20) (2) Cash shortages journal entry Dr: Cash $17,494.20, Dr: Cash shortages ( $1,798.20), Cr : Sales $15,696.00

Explanation:

The question is not complete, here is the missing part of the question

Date. Cash count. Sales per the cash register tape

August 1. 2,486.20. 2,222.50

August 2. 2,352.80. 2,135.90

August 3. 2,471.45. 2,303.45

August 4. 2,597.20. 2,287.30

August 5. 2,644.05. 2,335.45

August 6. 2,450.10. 2,155.50

August 7. 2,492.40. 2,255.90

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Total. 17,494.20. 15,696.00

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Here is the solution

To calculate the total amount of cash sales and cash shortages for the period August 1 to August 7

Date. Money collected. Sales Recorded. Shortages

August 1. 2,486.20. 2,222.50. ($263.70)

August 2. 2,352.80. 2,135.90. ($216.90)

August 3. 2,471.45. 2,303.45. ($168.00)

August 4. 2,597.20. 2,287.30. ($309.90

August 5. 2,644.05. 2,335.45. ($308.60)

August 6. 2,450.10. 2,155.50. ($294.60)

August 7. 2,492.40. 2,255.90. ($236.50

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17,494.20. 15,696.00. 1,798.20

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To prepare the journal entry dated August 7 that summarizes the cash sales and cash shortages from August 1 to 7

Cash Register Reconciliation

$

Cash count. 17,494.20

Less::Sales on cash register tape 15,696.00

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Cash shortages. 1,798.20

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The reconciliation shows there is a cash shortages of ($1,798.20)

The cash shortages journal entry will be

Dr: cash$17,494.20

Dr: Cash shortages $1,798.20

Cr: Sales$15,696.00