Question

Petty Cash Fund Entries

Journalize the entries to record the following:

Check No. 245-13 is issued to establish a petty cash fund of $1,300.

The amount of cash in the petty cash fund is now $481. Check No. 271-13 is issued to replenish the fund, based on the following summary of petty cash receipts: office supplies, $475; miscellaneous selling expense, $197; miscellaneous administrative expense, $123.

a. Journalize the entry to establish the petty cash fund.

	Petty Cash
	Cash

b. Journalize the entry to replenish the petty cash fund. For a compound transaction, if an amount box does not require an entry, leave it blank.

Answer 1

a)Journalize the entry to establish the petty cash fund.

No.	Particulars	Debit	Credit
	Petty cash	$1,300
	cash		$1,300

b)Journalize the entry to replenish the petty cash fund

Since the amount of the check to replenish the fund plus the balance in the fund do not equal $1,300, we record the discrepancy in the cash short and over account.

You can ignore that and make changes to entry if you disagree with treatement , entry will remain same just cash short and over account will be removed .

No.	Particulars	Debit	Credit
	Office supplies	$475
	Miscellaneous selling expense	$197
	Miscellaneous administrative expense	$123
	Cash Short and over	$24
	Cash		$819