GL0601- Based on Problem 6-2A LO P2 Perry Co set up a petty cash fund for paymen

Question

GL0601- Based on Problem 6-2A LO P2 Perry Co set up a petty cash fund for payments of small amounts. The following transactions involving the petty cash fund occurred in May hay 1s prepared a company check to eponioh tha und for the follos nade since May 15 Prepared a company check to replenish the fund for the following expenditures made since May 1. a. Paid $135 for janitorial services. b. Paid $101 for miscellaneous expenses. c. Paid postage expenses of $68. d. Paid $34 to The County Gazette (the local newspaper) for an advertisement. e. Counted $76 remaining in the petty cash box May 16 Prepared a company check for $200 to increase the fund to $600. May 31 The petty cashier reports that $240 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 $205. g. Reimbursed the office manager for business mileage, $103 h. Paid $34 to deliver merchandise to a customer, terms FOB destination. May 31 The company decides that the May 16 increase in the fund was too large. Ie reduces the fund by $160, leaving a total of $440

Explanation / Answer

The journal entries for petty cash fund is shown as follows:-

Journal Entries (Amounts in $)

Date General Journal Debit Credit May 1 Petty Cash 400 Cash 400 May 15 Janitorial Expenses 135 Miscellaneous Expenses 101 Postage Expenses 68 Advertising Expenses 34 Cash Over and Short (Bal. fig) (Total exp. 338-Cash bal 324) 14 Cash (400-76 remaining) 324 May 16 Petty Cash 200 Cash 200 May 31 Postage Expenses 205 Mileage Expenses 103 Delivery Expenses 34 Cash Over and Short (Bal fig) (360-205-103-34) 18 Cash (600-240 cash remaining) 360 May 31 Cash 160 Petty Cash 160

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