Question

On April 2, Granger Sales decides to establish a $320 petty cash fund to relieve the...

On April 2, Granger Sales decides to establish a $320 petty cash fund to relieve the burden on Accounting.

Required:

(a) Journalize the establishment of the fund.*
(b) On April 10, the petty cash fund has receipts for mail and postage of $44, contributions and donations of $27, meals and entertainment of $113, and $135 in the ending cash balance. Journalize the replenishment of the fund.*
(c) On April 11, Granger Sales decides to increase petty cash to $480. Journalize this event.*
*Refer to the Chart of Accounts for exact wording of account titles.
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Homework Answers

Answer #1

a.

Journal

Date

Account Title and Explanation

Debit

Credit
April 2 Petty cash 320
Cash 320
(To establish petty cash fund)

b.

Journal

Date

Account Title and Explanation

Debit

Credit
April 10 Mail and postage 44
contributions and donations 27
Meal and entertainment 113
Cash and over 1
Cash 185
(To replenish the fund)

c.

Journal

Date

Account Title and Explanation

Debit

Credit
April 11 Petty cash 160
Cash 160
(To increase petty cash fund)

Cash short and over = Beginning petty cash - (Mail and postage + contributions and donations + Meal and entertainment) - Ending petty cash

= 320 - (44 + 27 + 113) - 135

= $1

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