Question

willard company established a $410 petty cash fund on september 9, 2023. on september 30, the fund had $163.40 in cash along with receipts for these expenditures: transportation-in. $33.30; office supplies, $116.50; and repairs expense, $89.80. willard uses the perpetual method to account for merchandise inventory. the petty cashier could not account for the $7.00 shortage in the fund. a. prepare the september 9 entry to establish the fund

Answer 1

The establishment of Willard Company's $410 petty cash fund on September 9, 2023, is recorded with a debit to the Petty Cash account and a credit to the Cash account.

Step-by-step explanation:

The student asked how to record the establishment of a petty cash fund in the company's accounting records. On September 9, 2023, Willard Company set up a petty cash fund of $410. The journal entry to establish the petty cash fund on that date is a debit to the Petty Cash account and a credit to Cash. The entry would look like this:

• Petty Cash (Dr.) $410
• Cash (Cr.) $410

This entry increases the asset account Petty Cash and decreases the asset account Cash, reflecting that cash has been moved from the company's main cash to a petty cash fund.