Question

On September 1, Bartoletti Company established a petty cash fund for $100.

On September 10, you find the following items in the cash box:

·         Receipts for postage ($21.50), transportation-in ($32.00), and office supplies ($27.00).

·         $16.50 in cash.

It was decided to increase the amount of the fund to $125 when replenishing it.

Required: Prepare TWO journal entries:

1.      Establish the fund.

2.      Replenish/reimburse (& increase) the fund.

use template below

GENERAL JOURNAL

Date		Account Titles and Explanation	PR	Debit	Credit

Answer 1

Date	Account Titles and Explanation	Debit	Credit
Sep-01	Petty cash	$100
	Cash		$100
	( To record establish the petty cash fund)
Sep-10	Postage	$21.50
	Transportation- in	$32
	Office supplies	$27
	Cash short and over	$3
	Petty cash	$25
	Cash		$108.50
	( To record reimbursement and increase petty cash fund)

Cash short and over = Petty cash, beginning - ( Postage+ Transportation in + Office supplies)- Petty cash, ending

= 100- (21.5+32+27)- 16.50

= $3