Question

Garcia Co. set up a petty cash fund for payments of small amounts. The following transactions involving the petty cash fund occurred in May.
  

May		1		Prepared a company check for $450 to establish the petty cash fund.
May		15		Prepared a company check to replenish the fund for the following expenditures made since May 1.
				a. Paid $149 for janitorial services.
				b. Paid $112 for miscellaneous expenses.
				c. Paid postage expenses of $75.
				d. Paid $37 to Facebook for advertising expense.
				e. Counted $88 remaining in the petty cash box.
May		16		Prepared a company check for $150 to increase the fund to $600.
May		31		The petty cashier reports that $240 cash remains in the fund. A company check is drawn to replenish the fund for the following expenditures made since May 15.
				f. Paid postage expenses of $208.
				g. Reimbursed the office manager for business mileage, $104.
				h. Paid $34 to deliver merchandise to a customer, terms FOB destination.
May		31		The company decides that the May 16 increase in the fund was too large. It reduces the fund by $120, leaving a total of $480.

• Requirement
• General Journal
• General Ledger
• Trial Balance
• Impact on Income

Prepare the journal entries for each of the petty cash transactions.

No	Date	Account Title	Debit	Credit
1	May 01	Petty cash	450
		Cash		450
2	May 15	Janitorial expenses	149
		Miscellaneous expenses	112
		Postage expenses	75
		Advertising expense	37
		Cash over and short		77
		Cash		373

• Requirement

Answer 1

No	Date	Account title	Debit	Credit
1	May 05	Petty cash	450
		Cash		450
		[To record establishment of petty cash]
2	May 15	Janitorial expenses	149
		Miscellaneous expenses	112
		Postage expenses	75
		Advertising expense	37
		Cash over and short [88-(450-373)]		11
		Cash		362
		[To record petty cash expenses]
3	May 16	Petty cash	$150
		Cash		$150
		[To record petty cash fund increase]
4	May 31	Postage expenses	$208
		Mileage expense	$104
		Delivery expense	$34
		Cash short and over [$600-346-208]	$14
		Cash		$360
		[To record petty cash expenses]
5	May 31	Cash	$120
		Petty cash		$120
		[To reduce petty cash fund]