Question

Wildhorse Company established a petty cash fund on May 1, cashing a check for $125. The company reimbursed the fund on June 1 and July 1 with the following results. June 1: Cash in fund $3.55. Receipts: delivery expense $27.45, postage expense $36.25, and miscellaneous expense $55.60. July 1: Cash in fund $4.15. Receipts: delivery expense $18.90, entertainment expense $52.25, and miscellaneous expense $49.70. On July 10, Wildhorse increased the fund from $125 to $155. Prepare journal entries for Wildhorse Company.

Answer 1

Journal entries for Wildhorse Company include debiting expenses and crediting cash for reimbursements, as well as debiting Petty Cash and crediting Cash when increasing the fund size.

Step-by-step explanation:

The Wildhorse Company's creation and reimbursement of a petty cash fund are recorded in the company's accounting books through journal entries. Let's prepare the appropriate entries for the activities described.

June 1 Reimbursement

Total expenses accounted for: $27.45 + $36.25 + $55.60 = $119.30
Cash over short (if any): $125 (initial fund) - $3.55 (cash in fund) - $119.30 (total receipts)

= $2.15 overage

Journal Entry:

• Debit Delivery Expense $27.45
• Debit Postage Expense $36.25
• Debit Miscellaneous Expense $55.60
• Debit Cash Over and Short $2.15
• Credit Cash $121.45

July 1 Reimbursement

Total expenses accounted for: $18.90 + $52.25 + $49.70

= $120.85

Journal Entry:

• Debit Delivery Expense $18.90
• Debit Entertainment Expense $52.25
• Debit Miscellaneous Expense $49.70
• Credit Cash $120.85
• July 10 Increase in Fund
• The fund is increased by $30 ($155 - $125).

Journal Entry:

• Debit Petty Cash $30.00
• Credit Cash $30.00

Note that cash over and short is an account that is used to correct discrepancies due to errors or unexpected shortages or overages in the petty cash fund.

Answer 2

journal entries for Wildhorse Company are given below

Step-by-step explanation:

Wildhorse Company established a petty cash fund on May 1,

DEBIT CREDIT

Petty cash $125

Cash $125

The company reimbursed the fund on June 1

DEBIT CREDIT

delivery expense $27.45

postage expense $36.25

miscellaneous expense $55.60

Cash under/over $2.15

Cash ($125-$3.55) $121.45

The company reimbursed the fund on July 1

DEBIT CREDIT

delivery expense $18.90

entertainment expense $52.25

miscellaneous expense $49.70

Cash ($125 - 4.15) $120.85

Wildhorse increased the fund from $125 to $155

DEBIT CREDIT

Petty cash $30

Cash $30