Question

Blossom, Inc. decided to establish a petty cash fund to help ensure internal control over its small cash expenditures. The following information is available for the month of April. 1. On April 1, it established a petty cash fund in the amount of $271. 2. A summary of the petty cash expenditures made by the petty cash custodian as of April 10 is as follows. Delivery charges paid on merchandise purchased $76 Supplies purchased and used 41 Postage expense 49 I.O.U. from employees 33 Miscellaneous expense 52 The petty cash fund was replenished on April 10. The balance in the fund was $12. 3. The petty cash fund balance was increased $116 to $387 on April 20.

Answer 1

The Journal entry with their narrations shown below:-

Step-by-step explanation:

The Journal Entry is shown below:-

1. Petty cash Dr, $271

To Cash $271

(Being establishment of petty cash fund is recorded)

2. Freight-in Expenses(delivery charges) Dr, $76

Supplies expenses Dr, $41

Postage expenses Dr, $49

Loan to employees (Accounts receivable) Dr, $33

Miscellaneous expenses Dr, $52

Cash short and over Dr, $8

To Cash $259

($271 - $12)

(Being disbursement of cash is recorded)

3. Petty cash Dr, $116

To cash $116

(Being increase in petty cash is recorded)