Question

Problem 8-2A Establish, reimburse, and adjust petty cash L.O.P2 Shawnee Co set up a petty cash fund for payments of small amounts. The following transactions involving the petty cash fund occurred in May (the last month of the company's financial year). May 1 Prepared a company check for $400.00 to establish the petty cash fund. 15 Prepared a company check to replenish the fund for the following expenditures made since Mayt Paid $124 B0 for janitorial services Paid $101.8 for miscellaneous expenses C Paid postage expenses of $69.60. d Paid $91.44 to The County Gazette (the local newspaper) for an advertisement Counted $30.68 remaining in the petty cash box 16 Prepared a company check for $200 to increase the fund to $600 31 The petty cashier reports that $396.19 cash remains in the fund. A company check is drawn to replenish the fund for the following expenditures made since May 15. Paid postage expenses of $64.48 Reimbursed the office manager for business mileage. $51.33 Paid $53.00 to deliver merchandise to a customer, terms FOB destination 31 The company decides that the May 16 increase in the fund was too large. It reduces the fund by $50, leaving a total of $550. Required: 1. Prepare journal entries to establish the fund on May 1, to replenish it on May 15 and on May 31, and to reflect any increase or decrease in the fund balance on May 16 and May 31. Round your answers to 2 decimal places. Omit the sign in your response.) General Journal Credit Date May 1 Debit 400.00 Petty cash Cash 400.00 May 15 Janitorial expenses Miscellaneous expenses Postage expenses Advertising expense Cash over and short 124.80 101.88 69.60 91.44

how to calculate the dollar amount？

Answer 1

1) The required journal entries related to petty cash fund is shown as follows:-

Journal Entries (Amounts in $)

Date	General Journal	Debit	Credit
May 1	Petty Cash	400
	Cash		400
	(To establish the petty cash fund)
May 15	Janitorial expenses	124.80
	Miscellaneous expenses	101.88
	Postage expenses	69.60
	Advertising expense	91.44
	Cash over and short (bal fig) (124.8+101.88+69.6+91.44-369.32)		18.40
	Cash (400-30.68)		369.32
	(To record replenishment of fund)
May 16	Petty Cash	200
	Cash		200
	(To increase the fund balance)
May 31	Postage Expenses	64.48
	Office Expenses	51.33
	Delivery Expense	53.00
	Cash over and short (Bal fig) (203.81-64.48-51.33-53)	35.00
	Cash (600-396.19)		203.81
	(To replenish the fund)
May 31	Cash	50
	Petty Cash		50
	(To decrease the fund balance to $550 from $600)

Notes:-

1) Cash over and short is debited or credited on replenishment of fund by the balancing amount. (i.e. $18.40 on May 15 is credited and $35 on May 31 is debited).