Question

*E7.22 (LO 6) (Petty Cash) Carolyn Keene, Inc. decided to establish a petty cash fund to help ensure internal control over its small cash expenditures. The following information is available for the month of April. 1. On April 1, it established a petty cash fund in the amount of $200. 2. A summary of the petty cash expenditures made by the petty cash custodian as of April 10 is as follows. Delivery charges paid on merchandise purchased     $60.00 Supplies purchased and used  25.00 Postage expense  33.00 I.O.U. from employees  17.00 Miscellaneous expense  36.00 The petty cash fund was replenished on April 10. The balance in the fund was $27. 3. The petty cash fund balance was increased $100 to $300 on April 20. Instructions Prepare the journal entries to record transactions related to petty cash for the month of April.

Answer 1

		Debit	Credit
April 1	Petty cash	200
	Cash		200
April 10	Freight-in (Or Inventory)	60
	Supplies expense	25
	Postage expense	33
	Accounts Receivable/Loan to employees	17
	Miscellaneous expense	36
	Cash over and short	2		=173-(60+25+33+17+36)
	Cash		173	=200-27
April 20	Petty cash	100
	Cash		100