Waupaca Company establishes a $350 petty cash fund on September 9. On September

Question

Waupaca Company establishes a $350 petty cash fund on September 9. On September 30, the fund shou S104 in cash along with receipts for the following expenditures: transportation-in, $40; postage exne S123; and miscellaneous expenses, $80. The petty cashier could not account for a $3 shortage in the fs The company uses the perpetual system in accounting for merchandise inventory. Prepare September 9 entry to establish the fund, (2) the September 30 entry to reimburse the fund, and October 1 entry to increase the fund to $400.

Explanation / Answer

Sep 01

Cash fund A/c Dr $350

To cash A/c. $350

( Being cash fund created for petty cash expense s)

Sep 30

Transportation expenses A/c. Dr. 40

Postage expense A/c. Dr. 123

Miscellaneous expenses. A/c. Dr. 80

Abnormal loss ( shortage) A/c. Dr. 3

To cash fund. A/c. 246

(Being petty cash expenses incurred and recorded)

October 01

Cash fund A/c. Dr. $296

To cash. A/c $296

( Being cash transferred to cash fund for petty expense s).

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