Question

Kiona Co. set up a petty cash fund for payments of small amounts. The following transactions involving the petty cash fund occurred in May (the last month of the company's fiscal year).

May 1 Prepared a company check for $350 to establish the petty cash fund.
15 Prepared a company check to replenish the fund for the following expenditures made since May 1.
a. Paid $109.20 for janitorial services.
b. Paid $89.15 for miscellaneous expenses.
c. Paid postage expenses of $60.90.
d. Paid $80.01 to The County Gazette (the local newspaper) for an advertisement.
e. Counted $26.84 remaining in the petty cashbox.
16 Prepared a company check for $200 to increase the fund to $550.
31 The petty cashier reports that $370.27 cash remains in the fund. A company check is drawn to replenish the fund for the following expenditures made since May 15.
f. Paid postage expenses of $59.10.
g. Reimbursed the office manager for business mileage, $47.05.
h. Paid $48.58 to deliver merchandise to a customer, terms FOB destination.
31 The company decides that the May 16 increase in the fund was too large. It reduces the fund by $50, leaving a total of $500.
Required:
1. Prepare journal entries to establish the fund on May 1, to replenish it on May 15 and on May 31, and to reflect any increase or decrease in the fund balance on May 16 and May 31. (Round your answers to 2 decimal places.)

Answer 1

1-May

Dr Petty cash 350

Cr Cash 350

15-May

Dr Janitorial services 109.20

Dr Miscellaneous 89.15

Dr Postage expense 60.90

Dr Advertisement expense 80.01

Cr Cash over and short 16.1

Cr Cash 323.16

16-May

Dr Petty cash 200

Cr Cash 200

31-May

Dr Postage expense 47.05

Dr Mileage expense 38.5

Dr Delivery expense 48.58

Cr Cash 134.13

31-May

Dr Cash 50

Cr Petty cash 50

Step-by-step explanation:

Kiona Co Journal entries

1-May

Dr Petty cash 350

Cr Cash 350

15-May

Dr Janitorial services 109.20

Dr Miscellaneous 89.15

Dr Postage expense 60.90

Dr Advertisment expense 80.01

Cr Cash over and short 16.1

Cr Cash 323.16

(350-26.84)

16-May

Dr Petty cash 200

Cr Cash 200

31-May

Dr Postage expense 47.05

Dr Mileage expense 38.5

Dr Delivery expense 48.58

Cr Cash 134.13

31-May

Dr Cash 50

Cr Petty cash 50