Question

This assessment addresses the following course objective(s):

Record various business transactions in accordance with generally accepted accounting principles.

This purpose of this assignment is to understand what petty cash is and how it works within the accounting system and accounting for cash transactions.

Petty Cash El Greco Art Gallery had the following petty cash transactions in February of the current year. April Wrote a $350 check, cashed it, and gave the proceeds and the petty cashbox to Chloe Addison, the petty cashier 7 Purchased bond paper for the copier for $15.75 that is immer sed 11 Paid $40.50 COD Shipping charges on merchandise purchased for reale, orms FOB shipping point Nakashima uses the perpetual system to account for merchandise 13 Paid $7.15 postage to express mail contract to a client Reimbursed Adina Sharon, the manager. 573 for business mileage on her car 21 Purchased stationery for $68.77 that immediately used Paid a courier $21 to deliver merchandise sold to a customer Serms FOB destination 27 Paid $11.60 COD shipping charges on merchandise purchased for resale terms FOB shipping point Paid 556 for postage expenses 29 The fund had $23.87 remaining in the petty cash box. Sorted the petty cash receipts by accounts affected and exchanged them for a check to reimburse the fund for expenditures 30 The petty cash fund amount is increased by $90 to a total of $deo Required: 1. Prepare the journal entry to establish the petty cash fund. Date Accounts Debit Ipetty Cash 3501 Cach Credit 2. Prepare a petty cash payments report for April with these categories: delivery expense, mileage expense, postage expense, merchandise Inventory (for transportation-in), and office supplies expense. Sort the payments into the appropriate categories and total the expenditures in each category Total Petty Cash Expense Summary Date Category Charge Date Delivery Expense 24-Apr Mileage Postage Expense Mdse Inventory Transp in Office Supplies Expense Total Reimbursement

Answer 1

Answers:

1.

Date	General Journal	Debit	Credit
Apr-03	Petty Cash	350
	Cash		350
To establish the petty cash fund.

2.

Petty cash Expense Summary
Date	Category	Charge	Total
Delivery expense
Apr-24	Delivery of customers merchandise		21
Mileage expense
Apr-15	Reimbursement for mileage		73
Postage expense
Apr-13	Express delivery of contract	7.15
Apr-29	Purchased postage stamps	56	63.15
Merchandise inventory (transportation-in)
Apr-11	COD charges on purchases	40.5
Apr-27	COD charges on purchases	11.6	52.1
Office supplies expense
Apr-07	Purchased paper for copier	15.75
Apr-21	Purchased stationery	68.77	84.52
Total			293.77

3.

a.

Date	General Journal	Debit	Credit
Apr-30	Mileage expense	73
	Merchandise inventory	52.1
	Delivery expense	21
	Office supplies expense	84.52
	Postage expense	63.15
	Cash over and short	32.36
	Cash		326.13

[Note : Cash over and short = 350-23.87 = 326.13-293.77 = 32.36]

b.

Date	General Journal	Debit	Credit
Apr-30	Petty Cash	90
	Cash		90