Question

Fresh Foods established a petty cash fund of $88 on January 2. On January 31, the fund contained cash of $8.80 and vouchers for the following cash payments:

Maintenance expense	$	26.40
Office supplies		35.20
Transportation expense		17.60

The four distinct accounting events affecting the petty cash fund for the period were (1) establishment of the fund, (2) reimbursements made to employees, and (3) recognition of expenses including any amount of cash short or over and (4) replenishment of the fund.

Required
Show each of the four events in a horizontal statements model like the following one. (In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or a financing activity (FA). Enter any decreases to account balances with a minus sign. Round your final answers to 2 decimal places. Not all cells in the "Cash Flow" column may require an input - leave cells blank if there is no corresponding input needed.)

Answer 1

Stolection, 1) petty cash cash (petty cash fund establish by transferring a 88 to petty cash fund) 2) lo accounting entry is made to record a payment at the time it is taken from petty cash. It is considered both hexpedient and unnecessary to do so. Instead, the accounting effects of each payment are recognized when the fund is replenished. 3 and 4 ) Maintenance expense $26.40 office supplies Dr. & 35:20 Dr. & 17.60 Toensportation expense cash over and short Dr. so cash on & 79.2 (Recognition of expenses, cash over and short and replenishment of fund recorded). Note - cash over and shoot & cash to be replenished - - (88-8.6) - 66.4 +352 + High