Question

Exercise 8-5 Petty cash fund with a shortage LO P2 Waupaca Company establishes a $460 petty cash fund on September 9. On September 30, the fund shows $213 in cash along with receipts for the following expenditures: transportation costs of merchandise purchased, $47, postage expenses. $71, and miscellaneous expenses, $122. The petty cashier could not account for a $7 shortage in the fund. The company uses the perpetual system in accounting for merchandise inventory. Prepare (t) the September 9 entry to establish the fund, (2) the September 30 entry to reimburse the fund, and (3) an October 1 entry to increase the fund to $500 View transaction list Journal entry worksheet Prepare the journal entry to establish the Petty Cash fund. Note: Enter debits before credits General Journal Debit Credit Date Sept 9 Record entry Clear entry View general Journal

Answer 1

Date	Accounts titles and explanation	Debit	Credit
Sept 9	Petty cash	$460
	.. Cash		$460
	(To record the establish the petty cash)
Sept 30	Merchandise Inventory	$47
	Postage expenses	$71
	Miscellaneous expenses	$122
	Cash short and over	$7
	... Cash		$247
	(To record the reimburse of funds)
Oct 1	Petty cash ($500 - $460)	$40
	... Cash		$40
	(To record reimburse and increase of funds)