Waupaca Company establishes a $330 petty cash fund on September 9. On September 30, the fund shows $53 in cash along with receipts for the following expenditures: transportation-in, $57; postage expenses, $66; and miscellaneous expenses, $147. The petty cashier could not account for a $7 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 $380.

Question

Blake Holloway

Business

3 October, 16:09

Waupaca Company establishes a $330 petty cash fund on September 9. On September 30, the fund shows $53 in cash along with receipts for the following expenditures: transportation-in, $57; postage expenses, $66; and miscellaneous expenses, $147. The petty cashier could not account for a $7 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 $380.

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Answers (1)

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Carlos Fleming · Answer 1

The journal entries are given below:

Explanation:

The journal entries are as follows

1. On September 9

Petty cash A/c Dr $330

To Cash A/c 330

(Being the establishment of petty cash is recorded)

2. On September 30

Transportation-in $57

Postage expenses $66

Miscellaneous expenses $147

Cash over and short $7

To Cash $277

(Being the replenishment of petty cash fund is recorded)

3. On October 1

Petty cash $50 ($380, - $330)

To Cash $50

(Being petty cash amount increased)