Question

Question Content Area Stephanie Jo Company established a petty cash fund of $300 on May 1. At the end of the month, the petty cash fund has $42 of petty cash on hand and receipts for postage, $39; entertainment, $146; and office supplies, $70. Journalize the establishment of the fund on May 1 and the replenishment of the fund on May 31.

Answer 1

On May 1, Stephanie Jo Company establishes a $300 petty cash fund, debiting Petty Cash and crediting Cash. On May 31, petty cash is replenished, debiting various expense accounts and crediting Petty Cash and Cash.

Here are the journal entries for the establishment of the petty cash fund on May 1 and the replenishment of the fund on May 31:

Establishment of Petty Cash Fund (May 1):

Date | General Journal | Debit | Credit

May 1, 2024 | Petty Cash (Asset) | $300 |

| Cash (Asset) | $300

Replenishment of Petty Cash Fund (May 31):

Date | General Journal | Debit | Credit

May 31, 2024 | Postage Expense | $39 |

| Entertainment Expense | $146 |

| Office Supplies Expense | $70 |

| Petty Cash (Asset) | | $255

| Cash (Asset) | $255

- On May 1, Stephanie Jo Company establishes a petty cash fund by debiting Petty Cash and crediting Cash for $300.

- At the end of the month (May 31), the petty cash fund is replenished by debiting various expense accounts (Postage Expense, Entertainment Expense, Office Supplies Expense) and crediting Petty Cash for the total amount of expenditures ($39 + $146 + $70 = $255). The remaining amount is replenished with cash by debiting Cash and crediting Petty Cash.