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27 November, 09:59

Waupaca Company establishes a $410 petty cash fund on September 9. On September 30, the fund shows $134 in cash along with receipts for the following expenditures: transportation-in, $60; postage expenses, $70; and miscellaneous expenses, $135. The petty cashier could not account for a $11 shortage in the fund. The company uses the perpetual system in accounting for merchandise inventory. Prepare (1) the September 9 entry to establish the fund, (2) the September 30 entry to reimburse the fund, and (3) an October 1 entry to increase the fund to $485.

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  1. 27 November, 10:01
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    The Journal entries are as follows:

    (1) On September 9,

    Petty cash A/c Dr. $410

    To cash $410

    (To establish $410 petty cash fund)

    (2) On September 30,

    Printing expenses A/c Dr. $60

    Postage expenses A/c Dr. $70

    Miscellaneous expenses A/c Dr. $135

    Cash over and short A/c Dr. $11

    To cash A/c $276

    (To reimburse petty cash fund)

    (3) On October 1,

    Petty cash A/c Dr. $75

    To cash A/c $75

    (To increase the petty cash fund to $485)
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