Question

EcoMart establishes a $1,050 petty cash fund on May 2. On May 30, the fund shows $326 in cash along with receipts for the following expenditures: transportation-in, $120; postage expenses, $369; and miscellaneous expenses, $240. The petty cashier could not account for a $5 overage in the fund. The company uses the perpetual system in accounting for merchandise inventory.

Prepare the (1) May 2 entry to establish the fund, (2) May 30 entry to reimburse the fund, and (3) June 1 entry to increase the fund to $1,200.

Answer 1

The required entry of the days would be as follows:

Debit Credit

May 2 Petty cash 1050

Cash 1050

May 30 Merchandise inventory 120

Postage expense 369

Miscellaneous expenses 240

Cash short and over 9

Cash 738

June 1 Petty cash 150 =1200-1050

Cash 150

Step-by-step explanation:

The required entry of the days would be as follows:

Debit Credit

May 2 Petty cash 1050

Cash 1050

May 30 Merchandise inventory 120

Postage expense 369

Miscellaneous expenses 240

Cash short and over 9

Cash 738

June 1 Petty cash 150 =1200-1050

Cash 150