Question

During October, Pharoah Company experiences the following transactions in establishing a petty cash fund:

Oct.	1		A petty cash fund is established with a check for $240.00 issued to the petty cash custodian.
	31		A count of the petty cash fund disclosed the following items:
				Currency		$24.00
				Coins		0.40
				Expenditure receipts (vouchers):
				Office supplies	$39.90
				Telephone, Internet, and fax	25.90
				Postage	135.00
				Freight-out	8.70
	31		A check was written to reimburse the fund and increase the fund to $270.

Journalize the entries in October that pertain to the petty cash fund. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Enter answers to 2 decimal places, e.g. 25.20. Record entries in the order displayed in the problem statement.)

Answer 1

Journal Entries:

Date	Account title and explanation	Debit	Credit
Oct.1	Petty cash	$240.00
	Cash		$240.00
	[To open the petty cash fund]
Oct.31	Office supplies expense	$39.90
	Telephone, Internet, and fax expense	$25.90
	Postage expense	$135.00
	Freight-out	$8.70
	Cash short & over	$6.10
	Cash		$215.60
	[To replenish the petty cash fund]
Oct.31	Petty cash [$270.00-$240.00]	$30.00
	Interest payable		$30.00
	[To increase the petty cash fund]

Calculations:

Cash short & Over:
Fund balance A		$240.00
Cash on hand [24.00+0.40]	$24.40
Petty cash tickets [39.90+25.90+135.00+8.70]	$209.50
Total account for B		$233.90
Amount of cash missing A-B		$6.10