Question

Waupaca Company establishes a $390 petty cash fund on September 9. On September 30, the fund shows $126 in cash along with receipts for the following expenditures: transportation-in, $49; postage expenses, $67; and miscellaneous expenses, $134. The petty cashier could not account for a $14 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 $430.

Answer 1

WAUPACA COMPANY

JOURNAL ENTRIES

DATE	PARTICULARS	DEBIT	CREDIT
SEPT 09	Petty Cash A/C Dr.	390
	To Cash A/C		390
	(Being petty cash fund established)
SEPT 30	Transportation Expenses A/C Dr.	49
	Postage Expense A/C Dr.	67
	Miscellaneous Expenses A/C Dr.	134
	To Petty Cash A/C		124
	(Being fund reimburse)
Sept. 30	Petty Cash A/C Dr.	126
	To Cash A/C		126
	(Being fund increased)
Oct 01	Petty Cash A/C Dr.	38
	To Cash A/C		38
	(Being funds increased)