Question

 Palmona Co. establishes a $200 petty cash fund on January 1. On January 8, the fund shows $38 in cash along with receipts for the following expenditures: postage, $74; transportation-in, $29; delivery expenses, $16; and miscellaneous expenses, $43. Palmona uses the perpetual system in accounting for merchandise inventory.

 Prepare journal entries to (1) establish the fund on January 1, (2) reimburse it on January 8, and (3) both reimburse the fund and increase it to $450 on January 8, assuming no entry in part 2. (Hint: Make two separate entries for part 3.)

 Prepare the journal entry to establish the Petty Cash fund.

 Record the reimbursement of the petty cash fund.

 Record the reimbursement of the petty cash fund.

 Record the increase of the petty cash fund.

Answer 1

1
Jan 01	Petty cash	200
	Cash		200
2
Jan 08	Postage expense	74
	Merchandise inventory	29
	Delivery expense	16
	Miscellaneous expenses	43
	Cash		162
3
Jan 08	Postage expense	74
	Merchandise inventory	29
	Delivery expense	16
	Miscellaneous expenses	43
	Cash		162
	Petty cash	250
	Cash		250