Question

Problem 8-2A Establishing, reimbursing, and adjusting petty cash LO P2

Kiona Co. set up a petty cash fund for payments of small amounts. The following transactions involving the petty cash fund occurred in May (the last month of the company's fiscal year).

May		1		Prepared a company check for $300 to establish the petty cash fund.
		15		Prepared a company check to replenish the fund for the following expenditures made since May 1.
				a. Paid $93.60 for janitorial services.
				b. Paid $76.41 for miscellaneous expenses.
				c. Paid postage expenses of $52.20.
				d. Paid $68.58 to The County Gazette (the local newspaper) for an advertisement.
				e. Counted $23.01 remaining in the petty cashbox.
		16		Prepared a company check for $200 to increase the fund to $500.
		31		The petty cashier reports that $334.32 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 $53.73.
				g. Reimbursed the office manager for business mileage, $42.78.
				h. Paid $44.17 to deliver merchandise to a customer, terms FOB destination.
		31		The company decides that the May 16 increase in the fund was too large. It reduces the fund by $50, leaving a total of $450.

Required:
1. Prepare journal entries to establish the fund on May 1, to replenish it on May 15 and on May 31, and to reflect any increase or decrease in the fund balance on May 16 and May 31. (Round your answers to 2 decimal places.)

Answer 1

	Transaction	Debit	Credit
Date
May-01	Petty cash A/c -Dr	300
	To cash A/c		300
May-15	Janitorial services	93.6
	Miscelleoneous exp	76.41
	Postage	52.2
	Advertisement	68.58
	To cash short/over		13.8		300-276.99-93.9-76.41-52.2-68.58
	To cash		276.99		300-23.01
May-16	petty cash	200
	To cash		200
May-31	Postage	53.73
	Mileage exp	42.78
	delivery exp	44.17
	cash over/ above	25
	To cash		165.68
May-31	cash	50
	To petty cash		50