Aug. 1 Established the petty cash fund by writing a check payable to the petty cash custodian for $242.00. 15 Replenished the petty cash fund by writing a check for $196.00. On this date, the fund consisted of $46.00 in cash and these petty cash receipts: freight-out $53.40, entertainment expense $15.00, postage expense $12.70 and miscellaneous expense $112.50. 16 Increased the amount of the petty cash fund to $442.00 by writing a check for $200.00. 31 Replenished the petty cash fund by writing a check for $304.00. On this date, the fund consisted of $138.00 in cash and these petty cash receipts: postage expense $124.00, entertainment expense $153.60, and freight-out $25.40.

petty cash fund 242 debit

cash 242 credit

--to establish a petty fund--

freigth-out 53.40 debit

entertainment expense 15.00 debit

postage expense 12.70 debit

miscellaneous expense 112.50 debit

cash shortage loss 2.40 debit

cash 196 credit

--to replenish the fund on August 15th--

petty cash fund 200 debit

cash 200 credit

--to increase petty fund by 200 dollars--

freigth-out 25.40 debit

entertainment expense 153.60 debit

postage expense 124.00 debit

cash shortage loss 1.00 debit

cash 304 credit

--to replenish the fund on August 31th--

Explanation:

when replenish we don't use the petty fund account we adjust directly against cash leaveing the petty fund balance untouched. We only adjusted for increases or decreases in the total amount available at the petty cash fund.