Question

Cameron Co. established a $166 petty cash fund on January 1, 2020. One week later, on January 8, the fund contained $32.29 in cash and receipts for these expenditures: postage, $46.48; transportation-in, $29.88; store supplies, $36.27; and a withdrawal of $21.08 by Jim Cameron, the owner. Cameron uses the perpetual method to account for merchandise inventory. a. Prepare the journal entry to establish the fund on January 1. View transaction list View journal entry worksheet Debit Credit No 1 Date January 01, 2020 General Journal Postage expense Store supplies expense Jim Cameron, withdrawals Transportation-in Cash 30

Not sure how to do this or if im on the right track can anyone help?

Answer 1

Petty Cash : It is a fund established meet out the daily small Expense whose payment cannot be made with check because of the cost involved in writing, signing and encasing the checks are higher than the expense incurred. Under this method, entry for expenses or payment are not passed on daily but the same is passed at fixed interval like weekly, bi-monthly or monthly and the petty cash is also replenished on the same date.

Ans a Credit Debit $166 $166 Ans b $46.48 $36.27 $29.88 $21.08 $133.71 No. Date Account Title 1 Jan 1, 2020 Petty Cash Cash (To establish petty cash fund) Cameron Co. Petty Cash payments reports January 1-8, 2020 Receipts Postage expense Store Supplies Transportation in Jim Cameron, Withdrawal Total Receipts Fund Total Recorded Amount on hand Less: Actual Amount on hand Equal : Cash required to replenish petty tax Cash Over/(short) No. Date Account Title 1 Jan 8, 2020 Postage expense Store Supplies Merchandise Inventory Jim Cameron, Withdrawal Cash (To record expense incurred from petty cash and replenishment of the petty cash fund) $166.00 $32.29 -$32.29 $133.71 $0.00 Credit Ansc Debit $46.48 $36.27 $29.88 $21.08 $133.71