Question

Prepare the journal entries for the following petty cash transactions of LintonGaming​ Supplies:Feb.1Established a petty cash fund with a $ 150balance.28The petty cash fund has $ 14in cash and $ 145in petty cash tickets that were issued to pay for Office Supplies ​($ 35​)and Entertainment Expense ​($ 110​).Replenished the fund and recorded the expenses.Mar.15Increased the balance of the petty cash fund to $ 300.

Answer 1

Answer and Explanation:

1. Petty cash Dr, 150

To Cash account $150

(Being establishment of the fund is recorded)

For recording this we debited the petty cash as it increased the current assets and credited the cash as it decreased the value of current assets

2. Office supplies $35

Entertainment expense Dr, $110

To Cash account (balancing figure) $140

To Cash short and over $5 ($150 - $35 - $110)

Here we debited the office supplies and entertainment expense as it increased the expenses and we credited the cash account as it decreased the current assets

3. Petty cash account $150 ($300 - $150)

To Cash account $150

(Being the increase in balance is recorded)

For recording this we debited the petty cash as it increased the current assets and credited the cash as it decreased the value of current assets