Question

Petty Cash Fund Entries

Journalize the entries to record the following:
Check No. 12-375 is issued to establish a petty cash fund of $800. The amount of cash in the petty cash fund is now $272. Check No. 12-476 is issued to replenish the fund, based on the following summary of petty cash receipts: office supplies, $306; miscellaneous selling expense, $127; miscellaneous administrative expense, $79. (Because the amount of the check to replenish the fund plus the balance in the fund do not equal $500, record the discrepancy in the cash short and over account).
a. Journalize the entry to establish the petty cash fund.
Petty Cash
Cash
b. Journalize the entry to replenish the petty cash fund.
Office Supplies
Miscellaneous Selling Expense
Miscellaneous Administrative Expense
Cash Short and Over
Cash

Answer 1

Answer and Explanation:

The journal entries are shown below;

a. Petty Cash $800

To Cash $800

(Being the establishment of the petty cash fund is recorded)

b. Office Supplies $306

Miscellaneous Selling Expense $127

Miscellaneous Administrative Expense $79

Cash Short and Over $ 16

To Cash ($800 - $272)$528

(Being the replenish of the petty cash fund is recorded)